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Foreign bidders driving Aussie public M&A
A new report by Herbert Smith Freehills has found foreign investment fuelled Australian public M&A values in FY18.
Emma Musgrave
According to the firm’s tenth annual Australian Public M&A Report, foreign bidders accounted for 90 per cent of total deal value in FY18, representing $36.8 billion. This is up from 53 per cent in FY17.
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Further, the report found foreigners accounted for 52 per cent of bidders by number.
North American bidders were the most active in FY18, representing 14 of the 29 foreign bids and 22 per cent of total deal value, the report found. Meanwhile, Asian bidders also featured strongly, representing 18 per cent of all bidders and 10 of the 29 foreign deals, it said.
A Foreign Investment Review Board (FIRB) approval condition was included in 18 of the 56 deals during the period (32 per cent, up from 22 per cent last year) and approval was granted in all cases.
“Foreign bidders demonstrated an increasingly healthy appetite for Australian assets in the last financial year along with a preparedness to deploy significant amounts of capital to secure their targets," said Herbert Smith Freehills partner and co-author of the report, Paul Branston.
“[Foreign Investment Review Board’s] approval of 100 per cent of the public M&A deals it reviewed in FY18 shows that Australia really is open for business and highlights the presence of significant opportunities for offshore businesses looking to make strategic inroads in Australia.
“We expect foreign bidders to continue to underpin public M&A activity throughout FY19, particularly given the depreciation of the Australian dollar against foreign currencies.”
