Record-high M&A activity in 2021 – what to expect in 2022

Despite ongoing pandemic-related disruptions throughout 2021, Australia recorded one of its best years on record in overall M&A deal value and volume, particularly in numerous red hot sectors – health, technology, financial services, infrastructure and energy and resources. The surge in M&A activity is a result of influential factors such as low interest rates, increased market confidence, abundant capital and strong public company work and capital raisings.

In 2022, we expect to see the following key trends as the Australian M&A market booms:

• prominence of ‘environmental, social and corporate governance’ (ESG) in the deal process. ESG has been a growing factor in M&A transactions in recent years and we expect it will be a key component in due diligence assessments
• greater emphasis on due diligence, particularly in the areas of regulatory compliance, following the introduction of numerous temporary pandemic measures such as government subsidies and grants and public health measures
• rise in private equity and mid-market activity as confidence remains high
• strong growth in technology and software M&A as a result of digital transformation
• cautious dealmakers in offshore entities as they wait for policy announcements following the federal election in May
• scrip to remain popular because of the ongoing high market valuations, positive synergies and tax benefits it offers
• sellers have considerable bargaining power in a highly competitive, seller-friendly environment.

We examine these key trends and highlight our top 2021 deals in our latest M&A Review here. If you have any questions, please contact us or send us your enquiry here.

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

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