Australian and global M&A trends for 2026

By Gary Anders

A wave of megadeals across the US, Europe and the Asia-Pacific region saw global mergers and acquisitions activity accelerate over the course of 2025.

While global deal volume was similar to that of 2024, McKinsey & Company research shows the overall value of announced merger and acquisition (M&A) transactions rose by 43 per cent to US$4.7 trillion (A$6.7 trillion). More than 60 of these deals were valued above US$10 billion (A$13.97 billion).

Larger transactions accounted for the bulk of Australian deal value. The largest completed public transaction in 2025 was the A$14 billion merger between diversified investment group Washington H. Soul Pattinson Company Limited and industrial company Brickworks Limited, which ended a long-standing cross-shareholding structure.

According to the March 2026 Pitcher Partners Dealmakers Mid-market M&A in Australia report, 1132 deals were completed across Australia last year, representing an 8 per cent increase on the year before. Total deal value jumped by 11 per cent to A$143.7 billion.

Mid-market resurgence

Of even greater significance to the broader Australian market in terms of M&A trends, was the resurgence of activity in the middle-market segment covering deals valued between A$10 million and A$250 million. Australian mid-market volume rose 11 per cent from 307 deals last year, while deal value increased by 14 per cent to A$20.9 billion.

One of the largest mid-market deals in 2025 was the A$233 million acquisition of a 75 per cent stake in Versent Group, Telstra’s technology consulting and professional services arm, by India’s Infosys.

Stephen Craig CPA, a partner at Pitcher Partners Melbourne, says the real story lies in the mid-market, with the higher activity in 2025 marking the recovery from a negative deals trend that began in 2022.

 

"2025 was a genuine rebound, and that energy is flowing into 2026. However, this recovery remains uneven, some might say ‘K-shaped’. Like last year, we expect that well-capitalised buyers will continue to pursue large transactions while the mid-market will have a tougher time engaging in dealmaking."

 

This points to a fundamental change in sentiment towards the middle market, Craig says, with 71 per cent of dealmakers contributing to the firm’s research stating they expect to increase investment in the mid-market this year. A further 25 per cent said they will at least keep their dealmaking in Australia unchanged from 2025.

Valuation remains the most common deal-breaker in Australian mid-market M&A, the Pitcher Partner report notes, however Craig says buyers and sellers are finding it easier to reach agreement than in previous years.

“People want to do deals and are more proactive in getting them done,” he says. “So they are finding ways to agree on a valuation or bridge any gaps.”

Succession planning

Founder-led exits and ownership transitions are expected to define M&A deal flow for many years to come. “Succession planning is a big driver in the M&A mid-market,” says Craig. “We have typically found vendors, including Baby Boomers, have continued to run their businesses and delay an exit for longer than expected. But they are now reaching that decision point in great numbers.

“Succession planning is something that is separated from just pure market dynamics, because it is often influenced by lifestyle, health and other personal decisions, and less so by geopolitical or economic impacts.”

Gummy New CPA, a director at Gamma Capital Advisory, which provides support to businesses on both buy-and-sell-side M&A engagements, says a lot of his work revolves around the sale of businesses by founders because their children are not interested in taking the reins.

The founders either go external to private equity firms or there is a management buyout, he says. “I find management to be a very good avenue because they are there, they know the business better than anyone else, they are motivated to grow the business and they would love to own the business.”

New says the types of M&A deals being done has evolved significantly from the days when the default for a transaction was a complete exit.

“Now you are seeing more flexible structures, investors buying minority stakes, owners getting roll-ups into the parent company, earn outs and sellers getting the consideration paid in the form of shares in the parent company — which is also effectively an earn out.”

Regulatory reform impacts

A quick glance at the Australian Competition and Consumer Commission’s (ACCC) new acquisitions register shows there is no shortage of large proposed deals currently under assessment by the regulator.

The ACCC’s register could be regarded as the pulse of the top end of Australia’s M&A marketplace, and it still seems to be relatively strong despite the prospect of deteriorating economic conditions in 2026.

Under new ACCC merger reform laws that came into effect on 1 January 2026, subject to some exemptions, any proposed acquisition that falls above specified value and/or revenue thresholds must receive approval or a notification waiver from the ACCC before it can proceed.

The Pitcher Partners research shows that regulatory change has emerged as one of the dominant concerns in Australia for 2026, particularly around delays in government approvals for foreign investment.

 

"Interestingly, while larger deals (above US$30 million) saw a modest 2 per cent increase [in 2025], the volume of strategic deals remained broadly flat [in South-East Asia]. So, while the market did not collapse, we saw a move towards smaller-ticket transactions, a more selective approach and less reliance on megadeals."

 

“For cross-border buyers, dual track regulatory processes may create compounding delays that can stretch deal timelines by months,” the report states.

Craig notes that while dealmakers are finding their way through the new process, they are adapting to the new reality and viewing the new regulations as part of the compliance process.

“It is another cost and another time imposition. But I do not think it has changed the landscape or changed the momentum of the deal flow, because it is something businesses have got to get through one way or another. There is no way around it.”

In an address to the Committee for Economic Development Australia in February, the ACCC’s chair, Gina Cass-Gottlieb, said acquisitions that do not raise competition issues “can be dealt with quickly with minimal burden.

At the same time, the small number of complex and contentious acquisitions which raise potential competition concerns can be identified with mandatory notification and subject to careful scrutiny through a transparent, predictable and timely process, delivering better outcomes for consumers and businesses.”

Is momentum still there?

As 2026 unfolds, deal activity remains relatively strong despite rising geopolitical risks, widespread economic uncertainty and evolving regulatory challenges in Australia and abroad.

“2025 was a genuine rebound, and that energy is flowing into 2026,” says Munich-based Jens Kengelbach, managing director and global leader of mergers and acquisitions at Boston Consulting Group.

“However, this recovery remains uneven, some might say ‘K-shaped’. Like last year, we expect that well-capitalised buyers will continue to pursue large transactions while the mid-market will have a tougher time engaging in dealmaking.

“Generally, we see supply and demand intact. On one side, there are many corporates with significant cash and healthy balance sheets alongside private equity firms sitting on significant amounts of dry powder. On the other side, there are private equity firms looking to exit investments, corporates looking to divest businesses and certain markets undergoing consolidation.”

Kengelbach says while tariffs, geopolitics and national security considerations have moved from the periphery to the centre of the global M&A landscape, dealmakers seem to have adjusted to this new regime of heightened uncertainty and have become less fearful.

In South-East Asia, Andrew Heng FCPA, group managing partner at Baker Tilly Malaysia, says there was a noticeable softening in M&A value in 2025, even as deal counts remained relatively stable.

“Interestingly, while larger deals (above US$30 million) saw a modest 2 per cent increase, the volume of strategic deals remained broadly flat,” Heng says. “So, while the market did not collapse, we saw a move towards smaller-ticket transactions, a more selective approach and less reliance on megadeals.”

Heng says that there has already been a significant uptick in transactions in Malaysia this year, with private equity interest targeting a broad spectrum of businesses, from manufacturing to medical services.

“On the downside, geopolitical volatility, tariff concerns and caution from financial sponsors have made execution more challenging. The primary concern at the moment is not a lack of interest, but rather the friction of execution. Financing constraints, pricing and valuation gaps, as well as cross-border uncertainty, are prompting buyers to be more cautious.”

Looking ahead, Heng says that the most promising M&A opportunities seem to be in infrastructure, where the largest pools of capital are being deployed, as well as in energy and hard assets. Manufacturing and digital economies such as fintech and e-commerce also present significant opportunities.

Shanghai-based Jess Zhou, head of M&A China at global investment management consultancy ARC Group, adds that she is seeing a lot of Chinese companies acquiring overseas companies to establish local manufacturing operations.

“On the other side, we are also seeing a lot of the spin-offs by large Chinese conglomerates, and some Chinese companies are divesting overseas investments they acquired a long time ago.”

Powerful M&A trends

The McKinsey research says powerful trends should support global M&A momentum in 2026: “dealmaking as a response to change the search for new sources of growth, sustained interest in large deals and a continued drive to streamline portfolios in uncertain marketplaces”.

“Repeated rounds of external shocks have made executives increasingly aware that they must invest not only in core capabilities and growth, but also in transactions that could help control costs, protect margins and mitigate risks,” the research notes.

On the Australian front, Pitcher Partners says quality businesses are abundant across sectors, and both domestic and offshore buyers have been actively sourcing opportunities. “Corporate balance sheets are healthy and deals that stalled in the past three years are finally getting across the line … The question is no longer whether Australia’s M&A market has turned a corner. It is how far this cycle has left to run.”

Asia M&A deal value

Data supplied by Baker Tilly shows Singapore stood out as the regional leader in 2025, with 336 deals totalling US$31.7 billion (A$44.07 billion). Malaysia was next, followed by Vietnam, Indonesia, the Philippines and Thailand. Laos and Cambodia remain small contributors with limited pipeline depth.