Global M&A activity surges on liquid markets

Published June 28 2021

Strong liquidity in both equity and debt markets - together with cheap debt financing - are fuelling a surge in merger and acquisition (M&A) activity.

Global M&A volume from January to May 2021 hit $US2 trillion, 154 per cent higher than the previous corresponding period in 2020, according to data from Mergermarket.

Asia Pacific’s share accounted for 32 per cent of total global volume, with buyers from China and Japan accounting for a significant amount of the activity.

Australia, New Zealand and Pacific markets have also shown good traction with a number of landmark cross-border transactions.

You can read more about trends in the global M&A market in ANZ Institutional’s latest Corporate Finance Insights report.  Click here to access the report.

The Foreign Investment Review Board (FIRB) in Australia and Overseas Investment Office (OIO) review process in New Zealand have each recently undergone changes which may impact transaction timeframes. This has meant companies have had to prepare to engage early and proactively as the transaction progresses to reduce uncertainty and execution risk.

As of January this year, a number of reforms took effect at the FIRB, including the monetary threshold being reinstated, a new approval trigger and change to ‘foreign government investor’ definition to provide relief to passive investors.

Across the Tasman, the New Zealand government has enacted legislation to balance the importance of the role of overseas investment while continuing to protect NZ’s interests especially during and post pandemic.

Amendments include a new investor test, a temporary emergency notification requirement, a new national interest assessment for some transactions simplifying the regime for low-risk transactions and stronger enforcement powers.

Martin Hanrahan is Head of Corporate Advisory, ANZ and Ilhem Dib is Head of Corporate Advisory Asia, ANZ