Australia M&A 2026: Trends, Sectors, and Outlook

Market Overview: 2025 in Numbers

Australia remains one of the most active and transparent M&A markets in Asia Pacific. According to PwC Australia’s M&A Outlook 2026, Australian deal value reached US$79.5 billion in 2025 across 1,285 transactions — both down approximately 8% year-on-year — yet the market’s strategic significance grew. Inbound deals represented 45% of total deal value, up sharply from 30% the prior year, signalling that global capital increasingly views Australia as a destination for high-quality, defensible assets.

More than half of Australian CEOs — 52% — are planning major acquisitions in the next three years. Of these, 36% are explicitly targeting new capabilities and 27% are looking beyond their core sector. This is not a market chasing scale for its own sake. The appetite is for deals that transform business models.

“CEOs aren’t just chasing scale, they’re targeting capabilities and technology that will define how their companies compete in the future.”

— Kushal Chadha, Deals Leader, PwC Australia

Globally, the backdrop was constructive. McKinsey’s M&A Annual Report recorded global deal value up 43% to USD 4.7 trillion in 2025, with mega-mergers and undeployed private capital driving momentum into 2026.

Where the Money Went: Key Sectors

Australia’s M&A activity in 2025 was characterised by concentration at the top and breadth in the mid-market.

Energy, Utilities, and Resources

Energy, utilities, and resources (EUR) dominated headline deal value, jumping from 25% to 46% of total activity year-on-year. Buyers paid premiums for assets with predictable revenue streams and energy transition exposure. The gold sector was particularly active, driven by record-high gold prices, a weaker US dollar, and persistent safe-haven demand. Notable transactions included Gold Fields’ A$3.7 billion acquisition of Gold Road Resources and Ramelius’ A$2.3 billion takeover of Spartan Resources.

Critical minerals — lithium, rare earths, and battery metals — continued to attract foreign investment, though transactions involving these assets increasingly face heightened FIRB scrutiny.

Financial Services

Financial services was the second-largest category by value. Consolidation continued across wealth management, insurance, and payments. CC Capital and OneIM’s scheme for Insignia Financial was among the standout inbound transactions, reflecting ongoing interest from global capital in Australia’s well-regulated financial services sector.

Consumer, Industrials, and Technology

By deal count, activity was broader. Consumer and industrials together represented 45% of transactions, driven by succession planning, intergenerational wealth transfer, and founders reassessing their options in an environment of technological change. Technology and services also featured prominently, consistent with the global trend of acquirers seeking digital capabilities.

Herbert Smith Freehills’ Global M&A Report 2026 noted that the consumer sector remained a key driver of M&A volumes, with technology and industrials — particularly construction and infrastructure-related activity — also active.

Healthcare

While not leading by volume, healthcare M&A in Australia continued to attract PE and strategic interest, particularly in aged care, pathology, and specialist medical services. For a sector-specific perspective, see our article on selling a healthcare business in Asia.

Private Equity Activity

PE returned to the market with renewed conviction. Buyout value rose 32% to US$30.5 billion across 95 deals — a meaningful recovery after subdued activity following the 2022 peak. Financial sponsors accounted for approximately 30% of aggregate public M&A deal value in 2025.

McGrathNicol’s Forecast 2026 anticipates that sponsors will face increasing pressure to deploy capital and monetise long-held assets in 2026. With over USD 2 trillion in undeployed capital (dry powder) globally, PE activity is expected to accelerate — particularly in the mid-market, where pricing expectations are resetting after the 2021-2022 valuation peak.

Exit pressure is a defining theme. Limited partners are demanding cash returns, and the sponsor exit pipeline — relatively quiet in 2024-2025 — is expected to open up. Recapitalisations, continuation vehicles, and sponsor-to-sponsor secondaries will feature alongside traditional trade sales and IPOs.

For investors sourcing deals in Australia, the mid-market is where the action is. Mid-market transaction activity was up approximately 40% in 2025 and this trend is expected to continue, driven by public-to-private transactions, corporate carve-outs, and succession-driven exits from founder-led businesses.

Inbound Investment: Who’s Buying Australia

Australia’s appeal to foreign acquirers is not new, but the composition of inbound capital shifted in 2025.

United States. US bidders accounted for over 55% of cross-border inbound transactions by value. US corporates and sponsors see Australia as a transparent, English-speaking, common-law market with high-quality assets — a counterweight to more volatile emerging markets.

Japan. Japanese investment in Australia is accelerating. PwC reports that 9% of Japanese CEOs plan to invest in Australia in the next 12 months — nearly double the equivalent US figure. Energy, infrastructure, and defensible mid-market assets are the likely targets. This aligns with the broader pattern of Japanese outbound M&A we covered in our Japan cross-border M&A analysis.

Canada. Canadian pension funds and infrastructure investors — Brookfield, CPPIB, CDPQ — have been active acquirers of Australian infrastructure and real estate assets. Brookfield and GIC’s acquisition of National Storage REIT was among the headline transactions of 2025.

Greater China and Southeast Asia. Activity from Chinese and ASEAN acquirers remains present but more measured, with heightened FIRB scrutiny on transactions involving critical infrastructure, technology, and data.

Despite strong domestic bidder activity — Australian acquirers comprised nearly two-thirds of deals by number and over 60% by value — the trend is clear: Australia is attracting more foreign capital, not less.

The Regulatory Landscape

Two regulatory developments will define Australian M&A in 2026: the new ACCC mandatory merger notification regime and evolving FIRB scrutiny.

ACCC Mandatory Merger Notification

Effective 1 January 2026, Australia’s competition regulator — the Australian Competition and Consumer Commission — introduced a mandatory notification and clearance regime for certain transactions. This antitrust review process is the most significant merger control reform in decades.

Previously, merger review was voluntary and informal. The new regime requires formal notification and clearance before completion for transactions meeting specified thresholds. The practical impact is longer deal timelines, more extensive pre-transaction analysis, and the need to build regulatory conditionality into deal structures from the outset.

Herbert Smith Freehills expects that regulatory conditionality will be a defining feature of Australian public M&A in 2026, with bidders and target boards increasingly structuring transactions around approval conditions, extended long-stop dates, and allocation of regulatory risk.

Foreign Investment Review Board (FIRB)

FIRB approval is required for various acquisitions by foreign persons, including the acquisition of a 20% or greater interest in an Australian entity above the applicable monetary threshold. Thresholds are indexed annually — updated thresholds took effect on 1 January 2026.

FIRB scrutiny has intensified in recent years, particularly for transactions involving:

• Critical infrastructure — ports, telecommunications, electricity, water
• Critical minerals and resources — lithium, rare earths, battery metals
• Defence and dual-use technology — increasingly relevant given geopolitical dynamics
• Sensitive data — businesses holding significant personal or government data
• Agricultural land — subject to separate, lower thresholds

The Cosette Pharmaceuticals / Mayne Pharmaceuticals transaction — which ultimately failed due to a failure to obtain FIRB approval by the long-stop date — illustrates the real execution risk that FIRB conditionality introduces. Dealmakers should expect longer approval timelines, more detailed submissions, and more frequent conditions on approvals.

For cross-border acquirers, early FIRB engagement is now essential. Transactions involving sensitive sectors should build 60-90 days of additional timeline into their execution planning.

The Mid-Market Opportunity

Australia’s mid-market — loosely defined as transactions between AUD 20 million and AUD 500 million — is where many of the most attractive opportunities sit, and where the dynamics differ most from the large-cap public market.

Succession-Driven Deal Flow

Australia’s baby-boomer generation of business founders is aging. Across the country, owners of mature, profitable mid-market businesses are facing the same question that is driving the broader family business succession wave across Asia Pacific: what comes next? With limited succession options within the family and a growing pool of PE and strategic buyers, the supply of mid-market transactions is expanding.

PwC’s data confirms this: industrials and consumer transactions — many driven by succession and founder exits — represented 45% of all deals by count in 2025.

Advisory Infrastructure

Australia has APAC’s most developed mid-market advisory infrastructure. A deep bench of boutique investment banks (Luminis Partners, Gresham Partners, Greenhill Australia), specialist sector advisors, and mature business brokerage firms provides sell-side coverage across the market. This means that mid-market deal flow is more systematically intermediated than in most other APAC markets, where businesses of similar size often transact without formal advisory.

For cross-border buyers entering Australia’s mid-market, this is an advantage: the quality of information, due diligence materials, and process management is generally higher than in comparable transactions elsewhere in the region.

Valuation Environment

Mid-market EBITDA multiples in Australia have moderated from their 2021-2022 peaks but remain healthy by historical standards. Quality businesses in defensive sectors — healthcare services, business services, food, and education — continue to command premium multiples. The spread between asking prices and completed transaction multiples has narrowed, suggesting that vendor expectations are becoming more realistic after two years of adjustment.

Capital Markets and IPOs

The Australian IPO market showed signs of recovery in 2025. Listings rose 37%, from 67 to 92, with Virgin Australia’s re-listing trading above issue price in early 2026 — a signal of a receptive market for well-prepared offerings.

The character of Australian IPOs differs from the US. While US listings were dominated by AI and technology issuers, Australia’s recovery favoured smaller, pragmatic listings from profitable businesses. The market rewards operational quality and proven cash flow over growth narratives.

For PE sponsors, the improving IPO window offers an additional exit route alongside trade sales and secondary transactions. However, the market remains selective — only well-structured, appropriately priced listings of quality businesses are getting done.

Outlook for 2026

Several converging trends position Australia for an active M&A year:

Capability deals will outpace scale deals. More than a third of CEOs are seeking new capabilities through acquisition. Deals designed to transform business models will increasingly outpace those focused purely on market share.

PE exits will accelerate. Sponsors face liquidity pressure on long-held assets. Expect accelerated exit activity, particularly in the mid-market, as pricing expectations reset and the IPO window opens.

Energy transition and digital infrastructure will lead deal flow. Data centres, grid infrastructure, and storage assets remain firmly in focus, with buyers paying premiums for predictable revenue and long-term structural exposure.

Japanese investment will grow. Energy, infrastructure, and defensible mid-market assets are the likely targets as Japanese corporates continue their outbound M&A expansion across APAC.

Regulatory complexity will increase. The new ACCC regime and heightened FIRB scrutiny mean longer timelines, more conditions, and greater execution risk. Well-advised dealmakers will adapt by engaging regulators early and building flexibility into deal structures.

Succession exits will accelerate. As more founders of mature mid-market businesses decide to sell, the supply of quality deal opportunities — particularly in industrials, consumer, and business services — will expand.

What This Means for Cross-Border Dealmakers

Australia occupies a unique position in APAC M&A. It combines the transparency and rule-of-law predictability of a developed Western market with geographic proximity to Asia’s growth economies. For dealmakers based elsewhere in the region, three dynamics are worth noting.

Australia is a gateway market. Many Asian corporates and PE firms use Australian acquisitions as a stepping stone to broader international expansion, leveraging Australia’s regulatory familiarity with both APAC and Western markets.

The advisory market is mature but fragmented. Unlike Hong Kong or Singapore, where a handful of banks dominate mid-market coverage, Australia has a deep and competitive advisory ecosystem. Finding the right advisor for a specific sector and deal size requires market knowledge.

Regulatory preparation is non-negotiable. The days of informal ACCC engagement and straightforward FIRB approvals for non-sensitive sectors are over. Cross-border acquirers must build regulatory strategy into their transaction planning from day one.

For dealmakers looking to source or execute transactions in Australia, Amafi provides AI-powered matching and outreach across the full APAC region — including Australia’s mid-market, where traditional deal sourcing methods often miss founder-led businesses that have not yet engaged an advisor.

For broader APAC context, see our comprehensive guide to Asia Pacific M&A and our analysis of cross-border M&A in Asia.

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Looking to source or execute M&A transactions in Australia? Amafi helps investors and advisors identify opportunities across Australia and the broader APAC region — from succession-driven mid-market exits to cross-border platform acquisitions. Get in touch to explore how we can support your deal pipeline.