‘I’m expecting to see the M&A boom continue’

18 January 2022 By Lauren Croft
Tony Damian

Whilst the M&A boom of 2021 is likely to continue this year, lawyers working in this space will need to “get the balance right in relation to target engagement”, according to this M&A expert.

In conversation with Lawyers Weekly, Herbert Smith Freehills (HSF) M&A partner and winner of partner of the year at last year’s Australian Law Awards, Tony Damian, said that what excites him most about working in this space is the deal aspect of the M&A market.

“The deal thing is working with great people, collectively solving difficult problems on important deals,” he said.

“Whether it’s our valued clients, or the HSF M&A team, or the other advisers on a deal, I’ve always found it exciting to get a group of people together on a deal to drive to the common goal, navigating the various obstacles that inevitably arise and then getting it done.”

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This follows the release of HSF’s fifth annual global M&A report, M&A in 2022: FOMO overcomes FOGO.

After a global record year in M&A transactions in 2021, the report identifies continued drivers for strong activity in 2022. According to the report, initial pandemic-related FOGO (fear of going out) has largely been replaced with FOMO (fear of missing out) on the new opportunities that it is presenting.

However, the report also identifies some reasons for caution and states that “variant concerns will continue to threaten expectations of vaccine-led economic rebound”.

“There has also been no cooling of geopolitical tensions, as acute as ever in China’s relations with the West, and the UK’s relationship with Europe, as well as other conflicts around the world. But geopolitical headwinds have been accepted as the new normal by deal participants for a few years now, and the M&A market has proved its ultimate resilience in taking the pandemic in its stride,” according to the report.

However, Rebecca Maslen-Stannage, Australian M&A partner and chair of Herbert Smith Freehills, observed that “geopolitical headwinds have been accepted as the new normal by deal participants for a few years now, and the M&A market has proved its ultimate resilience in taking the pandemic in its stride”.

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As far as M&A in the Australian market, Mr Damian said that the “boom” of 2021 was likely to continue.

“I’m expecting to see the M&A boom continue. So, lots of deals, and lots of plays by the significant pools of capital across private equity and superannuation funds,” he said.

“And corporates will still be in there too as they look to drive growth agendas through M&A.”

There are also a number of M&A trends to look out for this year, added Mr Damian.

“Consortium deals will continue to increase in number and relevance, opening up larger acquisitions, so that’s one to watch. The increasing focus on ESG remains relevant too,” he said.

“ESG issues have actually become a deal driver and I don’t think that will change any time soon. I’d add increased regulatory scrutiny of deals to the agenda for 2022 as well.”

Moving forward, challenges for lawyers in this space will include striking the right balance when negotiating M&A transactions.

“A key challenge for bidders looking to execute significant deals is to get the balance right in relation to target engagement. While it’s great to have all the bells and whistles, sometimes this just isn’t realistic,” Mr Damian added.

“And so, the value that can be brought to the table is helping clients navigate the bidder and target dance – knowing when to push but also knowing when to get on with it.”

‘I’m expecting to see the M&A boom continue’
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