AUSTRALIA Law and Practice Contributed by: Alberto Colla, Keith Tan, Hugh McDonald and Dean Zinn, MinterEllison
1. Trends 1.1 M&A Market
1.2 Key Trends Some of the key trends in Australian M&A have been outlined below. • Technology sector growth: digital transfor - mation, including the adoption of generative artificial intelligence, has occurred across various industries and increased the demand for companies with advanced technological capabilities and digital innovation. • ‘Dual track’ structures: Continued use of dual-track (concurrent) scheme and takeo - ver bid structures (see 3.1 Significant Court Decisions or Legal Developments ). • Private equity activity: private equity firms have amassed significant capital and actively seek investment opportunities to deploy that capital. Private equity firms are also due to exit long-held Australian investments. • ‘Stub-equity’: Stub-equity deals involve offer - ing target shareholders flexibility to maintain an investment exposure in the target rather than exiting in full for cash at a point in the cycle where they may perceive the potential for higher future value. • Shareholder activism: this continues to be prevalent in Australian M&A transactions (see 11. Activism ). • Cross-border M&A: despite heightened geopolitical tensions and increased regu - latory scrutiny, Australian companies are still engaged in cross-border transactions, whether as targets or acquirers. With the Australian dollar recently hitting a five-year low against the US dollar in January 2025, offshore acquires are likely to see significant value in Australian targets, which are ‘ripe’ for M&A transactions. • Consolidation: in sectors such as energy, mining, building materials, technology and financial services, companies are merging to
The Australian public M&A market rebounded strongly in 2024, with 74 public M&A transactions being the largest number of deals announced within a calendar year since 77 transactions were announced in 2012, over a decade earlier. The private M&A market was equally robust and included Australia’s largest transaction for the year – the A$24bn acquisition of data centre pro - vider AirTrunk by Blackstone and the Canada Pension Plan Investment Board. The impetus for improved M&A activity in 2024 emanated from a combination of: • increasing economic certainty and stability due to a decline in inflationary pressures and interest rates being locked at 4.35% for the duration of the year (noting the Reserve Bank of Australia recently cut interest rates to 4.1% in February 2025). While the extent of further rate cuts internationally and domestically is far from certain, the tightening cycle appears to be over; • the availability of quality assets combined with a perception that Australia remains a jurisdiction with a relatively safe and stable governmental and regulatory environment; and • better alignment in pricing expectations between buyers and sellers. In the first quarter of the 2025 calendar, the Aus - tralian M&A market is showing no signs of slow - ing down, as evidenced by a string of competi - tive bid situations presently playing out.
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