Australia has seen healthy cross-border M&A activity in 2025 so far. Notable matters include CC Capital’s $2.5 billion announced acquisition of Insignia Financial, MAC Copper Limited’s $1 billion announced acquisition by Harmony Gold Mining Company Limited and James Hardie Industries plc’s $8.75 billion acquisition of AZEK.
We sat down with partner Patrick Lewis to discuss the Australia M&A deal market and what the rest of the year may bring.
1. Tell us about the deals Skadden recently worked on involving companies based and listed in Australia. What makes them interesting?
Skadden’s attorneys have deep experience in cross-border M&A and capital markets with an Australia nexus. The recent transactions show the breadth of that work — representing both U.S. financial sponsors acquiring Australian companies, and Australia-based and -listed companies being acquired.
These transactions are part of a broader public-to-private trend in the Australian M&A landscape. Private equity firms and institutional investors are increasingly pursuing take-private transactions. This shift is largely driven by a combination of factors, including a decline in initial public offerings and a growing appetite for acquiring publicly listed companies.
2. How would you characterize the current Australia M&A deal market? What roles have inbound investment and cross-border transactions played in the M&A market there?
I’d say the M&A market in Australia is currently experiencing a cautiously optimistic outlook. Global uncertainties are certainly creating a complex environment in dealmaking generally, with U.S. trade policy having an impact globally. And while Australia is a traditional ally of the United States, it’s still affected.
That said, it’s still very much an “open for business” type environment. We’re seeing signs of increased activity moving into the second half of 2025. Factors such as declining inflation, moderating interest rates, the weak Australian dollar and the stable political environment are contributing to the positive outlook. It helps that Australia has had a robust, long-standing foreign direct investment regime.
3. Are there particular industry sectors that are attracting interest from foreign investors? In particular, what can you tell us about deals in the critical minerals sector?
There’s been pretty consistent interest in tech, financial services and natural resources generally. We’re seeing a particular uptick in interest in the critical minerals sector — deals in the lithium space and transactions in rare earth minerals, for example.
The reason is continued global interest in renewable energy and the need for critical minerals to support the demand for batteries. When you talk about the growth of artificial intelligence (AI), what many people don’t think about is the amount of resources needed to power the data centers for that AI boom. We’ve seen some very large data center deals out of the U.S. in the last couple of years, including the $16.1 billion acquisition by Blackstone and the Canada Pension Plan Investment Board of Australian data center operator, AirTrunk.
Then there’s the desire for supply chain independence and, in some jurisdictions, a shifting away from reliance on China for these types of resources. The Australian government is actively promoting the critical minerals sector due to its strategic importance in the global supply chain.
4. Australia’s new merger regime will take effect in January 2026. Can you tell us what the reporting thresholds and clearance rules are intended to accomplish?
The new regime is really about bringing Australia more in line with the rest of the world — to having a true mandatory preclearance process. Going forward, if the combined Australian turnover is at least AU$200 million and the target has Australian turnover of AU$50 million or more, or if the global transaction value is at least AU$250 million, notification will be mandatory. The Australia Competition and Consumer Commission (ACCC) has said it is committed to quickly reviewing and approving the no-brainer transactions.
The big question mark is whether ACCC has the resources to be able to efficiently handle the increased volume of filings stemming from this change. The proposed filing fees — AU$56,800 for simple reviews and over AU$1 million for two-phase reviews — are among the highest globally, which risks deterring smaller transactions with minimal competition risk. Obviously, the change to the merger review process is going to impact broader international deals where the target has an Australian element, but I don’t think it’s going to have a substantive impact on dealmaking.
5. How should companies interested in M&A in Australia as a growth strategy prepare for a transaction? Are there unique characteristics of the market and regulatory regime that foreign investors, particularly U.S. investors, should be mindful of as they explore opportunities?
It’ll be important for companies to understand the regulatory landscape and due diligence needs associated with the Australian Foreign Investment Review Board and the new merger regime. It’s also crucial to monitor the global trends and economic conditions that may affect the Australian markets, as they can have significant implications on M&A activity.
The Australian Securities Exchange has a more stringent approach to continuous disclosure compared to the U.S. In the Insignia Financial transaction, the company publicly communicated updates regarding the bidding process, including offer prices and when bidders withdrew. This can be quite a surprise for U.S. investors.
We are also seeing U.S. M&A practice influence dealmaking in Australia. Recently, we saw the inclusion of Xerox-style provisions (which are designed to protect debt funders from claims by the seller or target in the event of a busted deal resulting from debt financing not being provided) being a firm requirement of U.S. debt funding sources both from the primary perspective of the lead arrangers but also as a critical item required by lenders coming into the debt financing as part of, and so as to ensure, a successful syndication. The transaction agreements entered into for Insignia Financial, Infomedia and Mayne Pharma have all included Xerox provisions.
6. What do the deals in the first half of 2025 tell us about what we can expect in the second half?
In many ways, the Australia deal market is tracking global M&A trends. Dealmaking is starting to ramp up, and the deals we’re seeing are larger ones. As I mentioned earlier, the trend of public to private continues in Australia, as there are significant amounts of private capital looking for good quality assets.
So, people are cautiously optimistic. We’re seeing lots of transactions in the financial services space, the tech space. I think the critical minerals is particularly hot, but there is definitely interest in some large transactions across a range of industries that we may see develop over the next few months.
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.