28 Feb 2020

State of Play: Australian M&A market trends

What's old is new again says Rory Moriarty with traditional assets in high demand by foreign investors. Hear from Rory as he covers the three major developments in the M&A market, including increasing regulatory activism to enforce policies which may influence the outcome of M&A deals in 2020.


To learn more about the key market trends and latest legal developments in Australia, visit our Australian Market: the state of play page.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.


Here today to give you an update on the M&A market and some future trends.  I see three things happening at the moment, the first one is, what is old is new again, what we're seeing is a lot of M&A in traditional industries or industries that may have been perceived as unloved for a while, in particular refining petrol stations, convenience operations. For example we've seen Chevron coming back into the Australian market and buying up petrol station businesses from Puma, we're also seeing a large takeover at the moment in respect of Caltex which owns fuel stations and refining assets.  We're seeing different groups coming together as a consortium bid looking at breaking up those assets so I expect to see a lot more M&A in that part of the market over the coming year around those types of assets. 

The second thing we're seeing is private equity continues to be a huge part of the Australian M&A scene. In particular they're still looking at the public company takeover transactions, looking at interesting and difficult transactions, for example, Village Roadshow at the moment is subject to interest from both Pacific Equity Partners and VGH Private Equity and we're seeing the use of call option and other takeover techniques to gain an upper hand in those type of contests. 

The third thing is Australian regulators are being far more active in M&A.  We're seeing, first of all, people like the ACCC being willing to object and litigate, they just recently suffered a loss in the TPG Vodafone transaction but I do not see that as making the ACCC less likely to enforce their policies or really get involved in M&A when they think there's an issue.  Second thing is, we're seeing our Foreign Investment Review Board being used as a regulator to enforce other regulatory policies of Australian Authorities, for example FIRB is working closely with the Australian Tax Office, and they're also working very closely with the ACCC on the competition law front. Finally we're seeing things like the Melco/Crown/CBH transaction where a Royal Commission is being used in respect of essentially a commercial M&A deal and that's certainly a first in Australia and we may see regulators more generally willing to be more aggressive and pursue their agendas in deals that are coming in 12 to 24 months.