NEW ZEALAND Trends and Developments Contributed by: Lance Jones, Olivia Hausmann, Chris Dann, Sam Wilson, Geoff Hosking and Jordan Wright, Anthony Harper
a number of bilateral processes have been protracted and fallen short of the finish line. Earn-out pricing structures have been prevalent this year in an uncertain economic environment, providing buyers with protection on forecasts or assumptions that underpin their valuations. Completion accounts based on net debt and net working capital adjust - ments remain prevalent, and a number of “locked- box” deals and hybrid structures have also been seen. Due diligence processes have generally been inten - sive and lengthy as buyers have deep-dived into and stress-tested earnings fundamentals and growth prospects, with the exceptions being well-managed competitive sell-side processes. What Is in Store for Cross-Border M&A in 2026? New Zealand is consistently regarded as one of the most attractive destinations in the Asia-Pacific region for ease of doing business and quality of investment opportunities. If anything, that reputation is only improving, and has been further bolstered this year by a number of pro-investment changes that are dis - cussed below. Looking forward to 2026, continued improvement in deal activity is anticipated as both buyers and sellers benefit from strongly pro-investment government pol - icy and rhetoric, lower and more stable interest rates and inflation, and improving business and investor confidence. Throughout 2025, New Zealand’s inflation figures have remained relatively stable and within the Reserve Bank’s target range of 1% to 3%. Interest rates are currently set at a neutral level and trending expansion - ary, with the New Zealand dollar increasingly stable at a relatively low level. However, the general elec - tion is due to be held in Q4, and a change in govern - ment could see the strong pro-growth and tight fiscal policy shift towards a greater focus on taxation and increased public sector spending, which may impact economic conditions and investor sentiment. As has been well documented during the last two years of M&A headwinds, the “dry powder” of PE and institutional investors persists, as does the back-log of
assets that are “on the block” for sale by PE funds to enable recycling of capital to investors. Adding to this, a surge of investment into new credit and PE funds in New Zealand under the new visa rules (discussed further below) is resulting in a build-up of additional capital that will need to be deployed. In addition, deal- makers have long anticipated a swathe of founder succession exits from mature family businesses, and a number of these transactions have already emerged in the small to mid-market. This trend is anticipated to continue and grow in 2026 as buyer and seller price expectations converge. It is expected that the TMT and financial services sec - tors will continue to drive M&A activity in 2026. It is also anticipated that 2026 will be a big year for deals in the healthcare sector, as demand for private health - care in New Zealand is at an all-time high, driven by an ageing population and an inefficient public healthcare system. Further, renewable and sustainable energy, in particular solar, has seen a lot of greenfield investment over the last couple of years, and there could be a need for some players to find secondary exits in 2026, leading to increased sector M&A activity. It is anticipated that the primary driver of M&A vol - umes for New Zealand in 2026 will be in mid-mar - ket and smaller transactions, as sellers increasingly come to market to meet cashed-up buyers who have been waiting for deployment opportunities and have increasing confidence in valuations and the econom - ic backdrop. This will be complemented by a select number of deals at the top end of the market, as seen this year – in particular as a result of high-value “on- the-block” mature PE fund assets coming to market. Legislative Reforms and Economic Developments in 2026 In February, the New Zealand Government announced its Going for Growth economic strategy, which is designed to drive economic growth by focusing on five core pillars. One of those pillars is ensuring that New Zealand has competitive business regulatory set - tings, and another is the promotion of global trade and investment. Some key developments in 2025 and 2026 aimed at delivering those pillars for economic growth are discussed below, including an overhaul of New Zealand’s FDI legislation, the Overseas Invest -
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