Foreign capital and deal certainty key to steady public M&A performance in Australia

Global law firm Norton Rose Fulbright reports that Australia’s public M&A market needs an injection of foreign investment in the remainder of 2025 to spur M&A deal activity and rebound from a decline in foreign capital in 2024.

With the country poised to hold a federal election on May 3, and amidst an overhaul of Australia’s merger regulation, potential easing of monetary policy and ongoing geopolitical volatility, dealmakers are searching for signs of optimism as a new Australian financial year approaches on July 1.

Early indicators in 2025 are positive: deal count for January and February 2025 matched the record pace of 2021 — a five-year high — and monetary easing could unlock more debt-funded transactions. 

This sits against a steady year of deals in 2024 analysed in Norton Rose Fulbright’s Public M&A Deal Trends Report 2025, released today, which tracks deal activity and trends across Australia's public markets.

“Australia’s strong corporate governance framework and well-worn deal protection mechanisms continue to offer confidence to bidders in negotiated transactions,” said Marshall Bromwich, Norton Rose Fulbright’s Australian corporate M&A lead. “Looking into the new financial year, the key question is whether foreign bidders can be tempted back into the market.”

Foreign capital key to igniting deal activity

With turbulence in global markets, Australia’s appeal as a relative “safe haven” for global capital, along with its reputation for certainty, transparency and institutional stability, could lead to a rebound in foreign capital in 2025, after a decline in 2024.

The Deal Trends Report shows that the number of foreign bidders fell sharply to 34 per cent of total deals in 2024 (down from 56 per cent in 2023). But foreign bidders still accounted for 63 per cent of 2024 deal value, underlining their continued strategic importance. 2025 started on a positive note with the US-based NinjaOne’s $412m acquisition of Dropsuite by scheme of arrangement announced in late January 2025. A weakening Australian dollar and early 2025 softness in valuations may present an opportunity for inbound investment in the months ahead. 

Notably, technology and services businesses with lower capital intensity are expected to drive take-private momentum, particularly among private equity buyers looking for value in undervalued listed assets.

Regulatory recalibration ahead

Regulatory developments are expected to shape 2025-26 financial year activity in Australia. The Australian Securities and Investments Commission is now reviewing submissions on its February 2025 discussion paper, addressing the decade-long decline in IPOs and listed entities, with changes to encourage public market vibrancy expected later this year.

Meanwhile, major reforms to the Australian Competition & Consumer Commission’s merger clearance process, set to begin transitioning from 1 July 2025, will introduce mandatory notification requirements and suspensory powers — the most significant overhaul in 50 years.

“Increased scrutiny, particularly for transactions involving sensitive sectors or complex tax arrangements, could slow deal timelines,” said report author and corporate M&A partner, Jeremy Wickens. “But well-prepared bidders who engage early with regulators can still succeed in this environment.”

Deal certainty underpins success

The Deal Trends Report also finds that negotiated deals made up 78 per cent of all transactions, with a striking 85 per cent success rate, outperforming unnegotiated deals by 18 per cent. Negotiated transactions also delivered higher average premiums (nearly 60 per cent over one-month VWAP vs. 37 per cent in unnegotiated deals).

“Deal protection devices such as break fees, matching rights, no-talk clauses, and notification rights remain almost universal features of successful transactions and are continuing to evolve with market needs,” Mr Wickens said. 

“The high-profile $9.1 billion acquisition of Altium by Renesas stood out for its asymmetrical break fee structure, with the Japanese bidder agreeing to a $411 million reverse break fee — more than four times the fee payable by the target — reflecting the regulatory risk it bore.”

The full Deal Trends Report can be read here.