2020 was a challenging year for the Australian M&A market, with a fall in activity in the middle of the year due to COVID-19. However, as economic confidence returned, a number of previously aborted deals were revived and new transactions were brought to the table.
The number of distressed transactions last year was also lower than many commentators were expecting, owing to (among other things) the insolvency moratorium, government stimulus and low interest rates, as well as the resilience and relative strength of the Australian economy.
While there are still elevated levels of uncertainty, some sectors are faring very well. We have seen a higher proportion of deals in the technology sector, with the consumer, healthcare, industrials and services sectors also performing well. Capital raisings and public company work are also on the upward trend, with valuations finishing strongly.
In 2021, our national M&A team predicts the following key trends:
- more emphasis on regulatory due diligence from financial buyers
- higher cross-border deal flows as overseas buyer and investor interest returns
- possible changes to the Government's capital gains tax relief measures following the Board of Taxation's review of the capital gains tax rollover provisions (with recommendations set to be made to the Federal Government in the first half of 2021)
- a more solid definition of casual employment with the introduction of the Fair Work Amendment (Supporting Australia's Job and Economy Recovery) Bill 2020 which will make identifying liabilities and rectifying non-compliance of target businesses easier.
The team explains each of these trends in further details and provides a snapshot of key deals across a variety of industries in their latest M&A Review. To read the full report, please click here.
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