(6 August 2025 – Australia) While merger and acquisition (M&A) activity in Australia was stagnant in H1 2025 outside of notable megadeals, investment bankers are optimistic a recovery is not far away.
Deal flow declined to 951 transactions in the 2025 financial year (FY) according to HLB Mann Judd, down from 1,038 in 2024. The average transaction value rose to A$148 million in FY2025, up from A$127 million in FY2024. With inflation within the RBA’s target range and further interest rate cuts anticipated, a recovery could be realised quickly.
Deal volumes throughout the 2025 financial year were more subdued than in recent years. Sluggish deal flow likely reflected caution around impending tariffs and uncertainty towards US President Trump’s trade policy.
Australia’s robust regulatory environment and falling interest rate environment are set to attract cross-border interest, with elevated inbound M&A from North America specifically within energy and technology sector verticals.
“While deal activity in Australia remained subdued over the past 12 months, a rebound may be on the horizon. Inflation has returned to the RBA’s target range, the labour market remains resilient and market sentiment has improved following the Liberation Day event in April 2025” commented HLB Mann Judd Partner Nicholas Guest and HLB Mann Judd Partner Simon James in the report.
“Uncertainty lingers, driven by ongoing global trade tensions and broader geopolitical risks. This, combined with the elevated interest rate environment and a weaker Australian dollar have coincided with a notable decline in M&A activity but presents opportunities for international investors.”
“Although M&A activity slowed in FY2025 amid heightened geopolitical, trade, and economic uncertainty, we believe value-accretive opportunities still exist in the mid-market for those willing to pursue them.”
Subdued Australian dealmaking activity is in stark contrast to the US. Banker’s summer holidays have been put on hold and dealmakers more energised than ever with the highest-volume week for US corporate M&A since 2021 according to LSEG.
Executives attribute renewed confidence to the relatively strong economy despite bouts of record high volatility, anticipated lower rates and newly ratified trade pacts.
“There’s a lot of dialogue taking place on large transactions that had been a glimmer in people’s eyes for a long while. This is likely going to be the busiest August the firm has had in years” commented Centerview Partners Co-President, Tony Kim.
“There are still some jitters that make it hard to get deals across the finish line, especially the big ones. But the fact that we’re seeing more deals get done, even with that backdrop, it’s definitely a positive.”