Seizing opportunities in M&A recovery: Tips for dealmakers in FY26

The previous fiscal year marked a significant turning point for dealmakers across Australia and New Zealand after a period of relatively subdued transaction activity. Economic challenges, evolving regulatory frameworks, and global geopolitical factors played substantial roles in shaping the landscape for mergers and acquisitions in the region.

Ansarada’s Australia and New Zealand FY25 Deal Indicators report compiles insights from industry experts on regulatory changes, cross-border dynamics, and specific sector trends in M&A, supplemented by real-time data from thousands of live deals in the ANZ region. Ansarada, a trusted provider of AI-driven virtual data rooms and transaction solutions for M&A professionals worldwide, aims to streamline deal processes and enhance transparency throughout the deal life cycle.

While deal flow experienced fluctuations during FY25, overall transaction volume showed marked improvement compared to the previous fiscal year. Data from the Ansarada Deals Platform indicated a notable uptick in buy-side deals, with a substantial 43% increase in open transactions during the June quarter alone. Notwithstanding these promising indicators of recovery, the market continues to face persistent challenges that have impeded deal flow, particularly in navigating the evolving regulatory environment.

According to Ansarada Managing Director Justin Smith, regulatory bodies such as the Australian Competition and Consumer Commission (ACCC) have intensified scrutiny of mergers, leading to potential delays in deal approvals. Foreign Investment Review Board (FIRB) clearances are also taking longer to secure, adding layers of complexity to transaction timelines. Looking forward, the pace and scope of future M&A activities will be molded by an interplay of technological innovations, regulatory shifts, and economic conditions. While market sentiment has turned optimistic and growth trajectories are positive, the evolving global landscape necessitates a cautious strategy to seize opportunities during favorable conditions.

Throughout FY25, M&A market trends were characterized by a smaller volume of large transactions, primarily concentrated within the small to mid-market segments. Piper Alderman partner Maria Capati forecasts continued volatility in M&A activities in FY26, with market consolidation emerging as a key driver for deal-making. Smaller players are expected to exit highly regulated sectors, while larger entities might engage in transactions to streamline operations or divest non-core assets due to the high cost of debt.

Incoming large-scale M&A transactions are also anticipated to involve active participation by international buyers, adding a distinctly global dimension to deal activity in the region. Notably, post-acquisition integration deals recorded a significant decline in volume compared to the previous fiscal year, alongside reductions in investor reporting, IPO, fundraising, and strategic review transactions.

While M&A activity has slowed in sectors like consumer staples, energy, financials, and materials, communication deals witnessed a substantial surge in the last quarter, despite an overall slight decline in volume. The real estate sector, however, demonstrated relative stability and even slight growth, as foreign investors showed renewed interest in the Australian market, according to Clifford Chance partner David Clee. Forecasts suggest this trend will persist, contributing to sustained activity in the real estate sector.

In conclusion, the M&A landscape for Australia and New Zealand appears poised for continued evolution in FY26, marked by a dynamic interplay of industry-specific drivers, regulatory adjustments, and global market forces. Deal makers will need to adopt agile strategies to navigate this complex environment and capitalize on emerging opportunities when they arise.