- A total of 59 deals were announced in FY25, consistent with the five-year average of 60 deals
- Deals valued at less than $500 million comprised 85% of all announced public M&A transactions, compared to 76% in FY24
- Takeover activity jumped in FY25, comprising 39% of deals by number compared to 29% in FY24 and 36% across the FY20-FY24 average
FY25 saw a total of $28 billion in M&A deal activity with a consistent stream of successful public M&A deals, according to a report from global law firm Herbert Smith Freehills Kramer (HSF Kramer).
Now in its 17th year, the firm's Australian Public M&A Report examined 59 control transactions involving Australian targets listed on the ASX that were conducted by way of takeover bid or scheme of arrangement in the 2024/25 financial year.
Nicole Pedler, HSF Kramer Partner, said that although deal volume was down from $49.2 billion in FY24, deal activity remained strong and in line with the five year average.
"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."
There was a lower headline figure for volume of transactions, but with proposals like XRG's $30 billion bid to acquire Santos, which Herbert Smith Freehills Kramer is advising Santos on, not inked in time to make it into the FY25 data set for the report, this dynamic is not expected to continue.
Australian bidders dominate as Energy & Resources sector remains strong
Australian bidders dominated the public M&A landscape this year, making up 58% of deals by number, up from 46% the year before, and 59% of deals by value, up from 23%.
While North American bidders were quiet in the first half of the year, activity increased following the US election cycle and consecutive rate cuts, with North American bids normalising to end the year comprising 19% of deals by both number (compared to 20% in FY24) and 18% by value (compared to 21% in FY25).
Breaking deals down by sector, Energy and Resources remained strong, contributing the highest proportion of deals by number (37%) and by value (48%). Within the sector, Gold, Copper and Nickel commodities were in high demand, comprising 68% of Energy and Resources deals and 50% of mega deals over the year.
Private equity activity strong and steady
Private equity (PE) involvement this year was on par with FY24, with 20% of all deals involving a PE bidder.
"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," Partner Jason Jordan said.
Takeover tide rolls in
Takeovers activity jumped in FY25, representing approximately 39% of deals by number, up from 29% the year before.
"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 explained.
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.
Raising the (pre-bid stakes)
According to the report, the jump in takeover activity was one of several changes in behaviour over the year.
Through FY25, there were 10 ASX-listed targets subject to competing offers, with the proportion of binding competitive bids rising from 14% in FY24 to 19%.
"Bidders were on the front foot, with an average price increase against the initial offer of approximately 32% and in the majority of cases, the bidder had acquired an average pre-bid stake of approximately 19% of securities on issue," Pedler said.
The year ahead
The new feature of the deal landscape will be the new merger clearance process and already Pedler and Jordan noted there is a huge amount of activity amongst deal teams to adapt strategies to ensure the best results.
Pedler and Jordan believe the year ahead will be busy as despite persistent uncertainty, a sense of needing to keep calm and carry on seems to pervade deal discussions.
"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," Jordan said.
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