10 September 2025
5 min read
#Mergers and Acquisitions, #Corporate & Commercial Law, #Digital Economy, #Property, Planning & Development, #Renewable Energy, #Superannuation, Funds Management & Financial Services, #Taxation
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Australia’s mergers and acquisitions (M&A) market entered FY2025-26 against mixed signals. Recent interest rate cuts and lower tariffs are generally supportive of deal activity, but uncertainty in the US is affecting investor confidence.
The Australian Competition and Consumer Commission’s (ACCC) new merger regime, coming into effect on 1 January 2026, has also created urgency, with many mid-market transactions being fast-tracked for completion before 31 December 2025.
For offshore investors, foreign investment approvals remain a significant challenge and the two-year ban on foreign purchases of residential property poses difficulties for businesses looking to send staff to Australia to establish local operations. Delays in securing FIRB clearance and evolving tax rules are adding to the regulatory burden on sellers through greater disclosure requirements, prolonged timelines and higher transaction costs, while also creating execution risk and financing challenges for buyers.
Based on the transactions we advised on in FY2024–25, we observed increased use of schemes of arrangement and a more measured approach to due diligence, given uncertainties in the market. Private equity portfolio companies were also actively pursuing bolt-on acquisitions and disposing non-core assets as they prepare for future exit events.
In addition to changes in the regulatory environment, we have observed other developments affecting businesses and investors across a range of sectors. We provide a brief summary of our market commentary on some of these sectors below.
Real estate
Following advocacy by the Property Council, the merger control regime now exempts a range of routine land acquisitions from mandatory notification, reducing regulatory burden on real estate M&A. These exemptions include acquisitions for residential development or land management businesses, land entities, lease extensions and renewals, land development rights, and sale and leaseback arrangements. Of the transactions we have been involved in, we are seeing more activity in the self-storage space. Schemes of arrangement have also emerged as the dominant structure for large public M&A, with approximately two-thirds of deals in the past two years adopting this structure.
Financial services
M&A activity in the financial services sector remains steady, with private equity deals re-emerging as market conditions improve and opportunities continue into 2026. The Australian Securities and Investments Commission is expected to release its views on strengthening public markets and a roadmap for private markets later this year, which could provide further guidance on the liquidity of private market investments. Overseas, the US' landmark executive order to include alternative assets in 401(k) retirement accounts could boost private market activity in Australia.
Renewables
Rising development costs and prolonged project timelines are causing many developers to divest their assets, while global uncertainty is shifting investor focus toward shorter-term, cash-flow-friendly opportunities. Battery energy storage systems (BESS) are emerging as a preferred asset class, and high volumes of asset sales are sustaining deal flow despite regulatory hurdles. Targeted tax measures under the ‘Future Made in Australia’ initiative are expected to benefit developers and operators over time. Meanwhile, the National Electricity Market Review and calls for a new carbon price may further influence investment sentiment and accelerate M&A activity.
Technology
The technology sector remains a key focus for M&A, with AI companies increasingly acquiring traditional businesses and driving strong market appetite for these deals. Marketing and media firms are also consolidating, with further mergers gaining ACCC approval. AI-powered platforms are transforming due diligence and transaction processes, and businesses are increasingly relying on these tools to improve efficiency, with a recent study showing that nearly 80% of firms using AI in M&A processes have experienced a reduction in manual effort.
Health & aged care
Demand for healthcare services in Australia continues to rise due to an ageing population and increasing prevalence of chronic diseases. Growth in telehealth, supported by government investments and policy frameworks, is enhancing service delivery and capacity. Consolidation in aged care is intensifying as smaller providers exit the market under the pressure of rising compliance obligations, higher operating costs and staff shortages. The new rights-based Aged Care Act commencing on 1 November 2025 is expected to create opportunities for M&A. AI-enabled robots are also being adopted to support routine care and address workforce shortages.
Our latest M&A Review provides further details on these trends and highlight a number of recent transactions we advised on across some of these sectors.
Heading into 2026, we expect investors to remain cautious as the ACCC’s merger reforms commence and uncertainty with Trump in the US continues.
Tax developments, FIRB complexity and sector-specific shifts will also influence dealmaking. According to Capital Brief, 40.9% of Australia’s top firms plan to act only if a specific opportunity arises, while 21.5% have no M&A intentions over the next 12 months.
Businesses looking to engage in merger activity in the year ahead should:
For more information about how dealmakers and foreign investors can prepare for the year ahead, download our latest M&A Review or contact us here.
Disclaimer
The information in this article 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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