- The number of deals was in line with the five year average indicating strong resilience and confidence by bidders in the face of acute volatility
- Bidders are taking control back, where takeovers were up year on year, with more than 50% launched without support of the target board, up from 35% in FY25
- Certainty on arrival is becoming paramount, with 91% of deals involving some form of pre-bid stake or shareholder support
- Private equity continues to make its mark, with deals involving a PE bidder jumping from 20% in FY25 to 26% in FY26
- Innovative structures are accelerating to match the needs of bidders and shareholders in a high volatility environment
Australia’s public M&A market proved its ability to adapt to uneasy market conditions in FY26, seeing $42.1 billion in deal activity across 57 transactions, according to a new report from leading global law firm Herbert Smith Freehills Kramer (HSF Kramer).
The firm’s Australian Public M&A Report, now in its 18th year, examined control transactions involving Australian targets listed on the ASX that were conducted by way of takeover bid or scheme of arrangement in the 2025/26 financial year.
Nicole Pedler, HSF Kramer partner, said that despite macroeconomic uncertainty, the number of deals at 57 was consistent with the five-year average of 61, while total deal value over the year increased significantly from $28 billion in FY25.
“We’ve seen that volatility can create opportunity, and a divergence between the listed price of a company and the value of its assets creates an opportunity for agile bidders,” she said.
The bulk of dealmaking activity was concentrated within the middle market value range, with deals valued at less than $500 million comprising 79% of all announced public M&A transactions, a small decrease from 85% in FY25.
The energy and resources sector remained a consistent source of activity, contributing the highest proportion of deals by number (46%) and the second highest by value (23.2%). Industrials had the highest proportion of deals by value at 40.9%, driven by the Qube, Atlas Arteria, and Johns Lyng Group mega deals.
Continued increase in takeover activity
While schemes remained the more popular deal structure, comprising 58% of deals, FY26 saw a continued increase in takeover activity, with the 24 announced representing 42% of all deals (building on 39% in FY25 and 29% in FY24). Of the deals that had completed by 30 June 2026, half had proceeded to compulsory acquisition.
The report found that more than 50% of takeovers through FY26 were initially launched without the support of the target board, up from 35% the previous year.
Jason Jordan, HSF Kramer partner, said, “This is reflective of a dynamic where bidders have sought to capitalise on the ability to make an offer to shareholders directly amidst volatile economic conditions.”
Bidder tactics at the fore
Pre-bid stakes also increased significantly for the second year in a row: 91% of deals involved some form of pre-bid stake or shareholder support on announcement, up from 78% the previous year, with these mechanisms relatively evenly divided between schemes and takeovers.
30 deals involved the bidder having a direct shareholding in the target, 31 deals involved a shareholder providing a voting intention statement or entering a voting agreement (or similar agreement) in support of the deal, and five deals involved a call option over target shares.
Entry into a pre-bid arrangement was worth the effort: of the 52 deals, 34 completed as at 30 June 2026 and just nine didn’t result in a change of control, often by virtue of a competing bidder with a superior offer.
Bidders also used increasingly innovative approaches to tools in their arsenal to achieve control, including best and final statements at the non-binding stage and exploding offers.
Private equity making its mark
The trend towards rising PE activity continued in FY26, with the report finding that 26% of deals involved a PE bidder, compared to 20% in FY25 and the five-year average of 18%.
Notably, PE bidders were involved in five of the year’s mega deals, including Macquarie Asset Management consortium’s $9.2 billion scheme with Qube, IFM’s $7.4 billion bid for Atlas Arteria, Brookfield and GIC consortium’s $4.0 billion scheme with National Storage REIT, and CC Capital consortium’s $3.2 billion scheme with Insignia Financial.
Deals involving a PE bidder achieved a success rate of 79%.
“In an environment where many buyers have been cautious and waiting for perfect conditions, private equity has remained willing to pursue large-scale opportunities where it sees strong long-term value,” Jordan said.
Adjusting to the new merger control regime
A key feature of the year in M&A has been Australia’s new mandatory merger control regime, which commenced on 1 January 2026.
The report found 284 transactions sought a waiver in FY26, with the 270 approved taking an average of 11 business days. Further, 147 transactions went through a Phase 1 assessment, with the 140 approved taking an average of 18 business days.
Two transactions progressed to, and completed, a Phase 2 assessment, with one approved: Ampol Limited secured ACCC clearance for its $1.1 billion acquisition of EG Australia. HSF Kramer advised Ampol on all competition aspects of the acquisition, including Ampol’s notification and strategic engagement with the ACCC.
“While the first year of the regime has provided useful insights into the ACCC’s approach to waivers and Phase 1 reviews, several features of the framework remain untested,” Pedler said.
Looking ahead
With geopolitical conditions still uncertain, Pedler and Jordan expect to see the same themes driving dealmaking in the new financial year.
“As we have seen this year, given the opportunities that may present to acquire high-quality companies, we expect both the prevalence of PE bidders and the popularity of the industrials and energy and resources sectors to continue to drive dealmaking over the next year,” Pedler said.
Jordan added that HSF Kramer’s dealmakers also expect the rate of takeovers relative to schemes to continue to increase.
“While for the very large transactions schemes will almost always provide the best solution, the flexibility of takeovers and the level of control they give bidders will be an increasingly essential factor to respond to the variable conditions and volatility,” he said.
You can find a copy of the report here.
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