Despite long-term changes, M&A activity will be strong and steady this financial year, lawyers anticipate.
According to Herbert Smith Freehills Kramer’s (HSF Kramer) newest Public M&A Report 2025, fifty-nine control transactions – including companies listed on the ASX – were conducted by way of takeover bid or scheme of arrangement this financial year.
This number stayed relatively consistent when compared to the five-year average of 60 deals.
HSF Kramer partner Nicole Pedler noted that deal activity remained strong against the five-year average despite the deal volume falling from $49.2 billion last financial year.
Eighty-five per cent of all announced public M&A transactions were valued at less than $500 million, it found, a jump from 76 per cent last financial year.
For FY2024–25, a total of $28 billion in M&A deal activity and a consistent flow of public M&A, the report added.
“Looking at this year’s data, we cannot help but wonder if there is something to the ‘nothing ever happens’ rhetoric anecdotally discussed in the market,” she said.
“In a numbers sense, we saw a steady stream of successful control proposals and competitive fights for attractive businesses despite the backdrop of federal elections, global trade wars, major conflicts, and ongoing volatility and uncertainty.”
HSF Kramer found a lower headline volume for this financial year; however, it noted that XRG’s $30 billion bid to acquire Santos – advised by HSF Kramer – did not make it on time for FY24–25.
Aussie bidders dominate a strong energy and resources sector
Aussies had 58 per cent of the number of deals and 56 per cent of value, increasing from 46 per cent and 23 per cent, respectively, from FY2023–24.
In FY24–25, activity from North American bidders decreased compared to the last financial year; the number of deals decreased from 20 per cent to 19 per cent, and value dropped from 21 per cent to 18 per cent.
In observing a segmented market, energy and resources contributed to the highest number of deals at 37 per cent by number and 48 per cent by value.
Gold, copper, and nickel commodities also had strong figures, having made up 68 per cent of energy and resources deals and 50 per cent of “mega deals” over the year.
Private equity activity going strong
This year’s private equity (PE) activity matched last financial year’s, and 20 per cent of all deals involved a PE bidder.
HSF Kramer partner Jason Jordan said: “This year, we saw an increased willingness from PE bidders to depart from the traditional playbook, with the latest chapter in FY25 seeing bidders proposing to acquire only a portion of the target and maintain its ASX listing.”
Takeovers on the rise
This financial year, takeover activity increased, accounting for approximately 39 per cent of deals by number, compared with 29 per cent the previous financial year.
“Takeovers were launched at significant premiums, often with the support of the target board, and took about a month less than schemes to complete, showing that despite the ongoing prevalence of schemes, takeovers continue to serve an essential purpose,” Jordan said.
Based on its findings: “The average number of days to compulsory acquisition was down from 126 in FY24 to 80 in FY25, while average days to close of offer was down from 104 in FY24 to 85 in FY25. Meanwhile, the report found the average time taken to close out a scheme was 135 days.”
Binding competitive bids looking up
Throughout FY24–25, ten ASX-listed targets had competing offers, and the proportion of pre-bids rose from 14 per cent last financial year to 19 per cent, it said.
The report found an average price increase against the initial offer of approximately 32 per cent, and in the “majority of cases, the bidder had acquired an average pre-bid stake of approximately 19 per cent of securities on issue”.
What’s next
Pedler and Jordan forecast a busy year ahead, and amid persistent uncertainty, fostering calm is the focus in deal discussions moving forward.
Emerging on the scene will be a new merger clearance process, which will change the deal landscape; big efforts are being made among deal teams to optimise their strategies as a result, said Jordan and Pedler.
Jordan said: “With predicted additional rate cuts, a known quantity in the federal government, productivity focus and the ever-increasing funds in our superannuation and private capital systems, we see the next year as having no reason not to trend up for schemes and takeovers.”
