Australian M&A market demonstrates resilience amid global economic challenges

Mid-market deals remain attractive despite overall contractions in values and volumes, according to the latest analysis of Australian M&A by Pitcher Partners. 

 Australian dealmakers are navigating a complex M&A landscape in 2024, balancing caution with strategic opportunity. 

 Pitcher Partners’ latest Dealmakers report revealed a nuanced picture of the market, where overall deal volumes have contracted but values remain resilient. 

The report showed overall deal volumes declined 9% compared to the same period in 2023 to 416 transactions. Deal values showed a slight uptick of 1%, reaching $52.85 billion.  

The mid-market segment, comprising deals valued between $10 million and $250 million, experienced a more pronounced downturn, with deal values contracting 16% to $7.96 billion, and volumes falling 18% to 117 deals. 

Despite these challenges, inbound M&A remained a bright spot, underscoring the continued appeal of Australian assets to international investors.  

Offshore buyers completed $30.2 billion worth of deals, marking the second-highest half-year total in five years and accounting for a substantial 39% of all M&A activity in the Australian market. 

Energy, mining and utilities emerged as the front-running sector in both overall and mid-market M&A, driven by growing emphasis on sustainability. 

EMU accounted for 21% of total deal value, highlighting the increasing importance of ESG considerations in investment decisions. 

In contrast to the Australian market, global M&A demonstrated resilience, with deal values surging 23% to reach US$2.5 trillion, even as deal volume declined by 13%. This global trend suggests a shift towards higher-value transactions in the international M&A arena. 

“Despite initial enthusiasm earlier this year, with 70% of respondents in our February outlook survey planning to increase M&A activities, dealmakers are proceeding with caution,” Pitcher Partners Melbourne Partner Michael Sonego said. 

 “The current macroeconomic environment, underpinned by interest rate unpredictability and persistent inflation, has reintroduced a degree of uncertainty in the market.”