M&A deal highlights in Australia in 2018
2018 was a blockbuster year for M&A in Australia. We saw strong activity, with a number of mega-deals in the mix. Dominant sectors included property, financial services, telecommunications and media as well as energy and resources. There were different drivers for this activity.
In financial services, we had a Royal Commission looking into the banking and wealth management industries. This has been a catalyst for some banks to move away from vertical integration and focus on core areas.
In media, there was a lessening of regulation, allowing further consolidation in the sector.
In the energy and resources sector, we saw large capital expansion commitments by major iron ore producers which are also having a positive effect on supporting sectors such as mining services.
Other key drivers across the board were continued strong interest from foreign bidders, debt being readily available and increasing participation from private equity players with significant capital to deploy.
We are also seeing political headwinds, with a likely federal government election in 2019 as well as greater regulatory intervention and scrutiny on transactions, highlighting the need for careful planning and early strategic engagement.
Despite this, we are confident that the strong deal momentum will continue in 2019, underpinned by strong foreign investment and private equity interest, robust activity in sectors such as financial services, property, healthcare and energy and resources, as well as demergers and divestments for companies looking to return to a core focus.