M&A has best half since 2021 as foreign investors move on market

Overseas interest in Australian resources space drove deal value in the first half of CY2026, with the best six months for M&A since 2021, on the back of global demand for commodities, and increasingly buoyant commodity prices. 

Deal value in the first half of the calendar year grew 25 per cent year on year and 73 per cent above 2024, with mining and oil and gas accounting for four of the biggest deals across the board and five of the top 10 in the mid-market.  

Despite the increase in deal value, deal volumes fell 14 per cent on the prior corresponding period in calendar year 2025 and 3 per cent on that of 2024. 

Still, the average deal size climbed to $175m across the market, which may partly reflect typical reporting patterns at the halfway mark, with larger deals recorded in real time while smaller transactions are often captured later in the year as firms report their full deal activity. 

In a good sign for dealmaking in 2026, momentum for bigger M&A continued to build, with three times the value in the second quarter of CY2026 over the prior quarter, as the market rebounded.  

In the mid-market, both volume and value softened in a quieter second quarter, despite the average deal value remaining relatively steady at $67.5m. 

Pitcher Partners Sydney Corporate Finance Partner, Andy Hough, said one of the strongest trends in H1 was overseas buyer interest with half the top 10 deals in both the total market and mid-market involving an overseas buyer.  

“Australian assets remain attractive to offshore buyers, and Australia remains a great place to invest given its political stability, strong economy, proximity to Asia and cultural and legal system alignment with US and European buyers,” he said.  

“It may also be that overseas buyers see value where Australian buyers don’t, particularly among long-term strategic acquisitions.  

“There is a risk that local trade and Australian private equity could be caught out by letting quality Australian companies slip out of their grasp.” 

One notable feature of H1 CY2026 was the Australian government’s participation in several of the top 10 mid-market deals.  

Export Finance Australia took a US$100m ($145 million) equity stake in Arafura Rare Earths in April, while in January, the National Reconstruction Fund invested $75 million in preferred equity in Gilmour Space Technologies.  

That deal brings the $15 billion National Reconstruction Fund’s investment in Australian business to more than $579m in H1 and $1.7bn since inception.  

Pitcher Partners Melbourne Corporate Finance Partner, Stephen Craig, said there was a clear appetite for advanced and critical technology in Australia, both at the upper end of values and in smaller deals.  

While technology, media and telecommunications accounted for only a fraction of the value of energy, mining and utilities deals, the sector was comparable by volume, pointing to sustained interest in local innovation and technology. 

“We have strong and competitive Australian companies in this space and the view from acquirers is both that they are well-priced, and that buying is faster than building,” he said.  

Mr Craig said a stronger second half was on the cards, given the momentum in Q2 and the fact the first half had remained solid despite geopolitical disruption from the war in the Middle East. 

Second half volumes have been higher than first half volumes in every year since 2020.  

But he cautioned that the jitters of previous years could return if the economy faltered.  

The Reserve Bank cut rates three times over calendar year 2025 to 3.6 per cent, then reversed course in 2026 with three hikes, most recently holding at 4.35 per cent.  

“The thing that could derail a strong M&A run into the year will be a loss of confidence,” he said.  

“Uncertainty around the recent Budget changes and concern around monetary policy both have the potential to deter deal flow.  

“While it may be challenging to get a deal completed by 30 June, business owners who begin preparing for a sale now are likely to have a valuation in place before the end of the financial year under the current system, which means they may be less affected even if settlement occurs in the new financial year,” he said.