Dealmakers 2026 outlook

Contents

Methodology

For this publication, Pitcher Partners commissioned Mergermarket to canvass the opinions of 60 M&A dealmakers who have completed at least one deal in Australia in the past 12 months. 60% of the respondents were from Australian corporations, 30% were from foreign corporations with operations in Australia, 5% were from Australian private equity firms, and 5% were from foreign private equity firms.

All dollar figures, unless otherwise stated, are in Australian dollars (AUD). Value figures are approximations and have been rounded. Data used in this report was compiled on 5 January 2026 using Dealogic data and additional sources noted within this report.

Percentages may not sum to 100% due to rounding. Unless otherwise stated, all date references refer to calendar year and not financial year.

Foreword Australian M&A in 2026

The Australian M&A market is recovering strongly – and the mid-market is leading the way.

The numbers tell a compelling story. Deal values rose 11% year on year in 2025, volume increased 8%, and dealmaker confidence has improved markedly – from 6.97 out of 10 in 2025 (the lowest in this publication’s history) to 8 out of 10 for 2026. This is not a modest recovery. This is a market finding its stride.

Several forces are converging to drive this momentum. Australia’s stable position in the Asia-Pacific region has grown more attractive as US trade dynamics and geopolitical realignments continue to reshape the global landscape. And while Australia’s new merger reform laws initially raised concerns about heavier regulatory scrutiny,

they appear to have delivered something dealmakers value equally: clarity. When buyers and sellers have a clearer sense of the process to gain regulatory approval, transactions move forward.

Nowhere is that momentum more evident than in the mid-market – transactions valued between AU$10m and AU$250m. Deal values in this segment surged 14% in 2025, with volumes rising 11%. Quality businesses are abundant across sectors, and both domestic and offshore buyers have been actively sourcing opportunities.

As we look to 2026, the fundamentals are solid. Corporate balance sheets are healthy and deals that stalled in the past three years are finally getting across the line. With sentiment and deal activity both trending positively, the recovery feels well-founded. 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.

Key findings

Australia

8% 11% 85% 63% 58%

change in 2025 deal volume (1,132) for overall M&A in Australia compared to 2024 (1,045)

Mid-market

change in deal values ($143.7b) for overall M&A in Australia compared to 2024 ($129.8b)

say their most recent Australian investment was opportunistically driven

say vendor valuation expectations in the current market are realistic

11% 14% 71% 42%

change in 2025 deal volume (307) for mid-market M&A in Australia compared to 2024 (276)

change in 2025 deal value ($20.9b) for mid-market M&A in Australia compared to 2024 ($18.2b)

say they will increase their investments in the mid-market in the year ahead

say succession planning will be the top deal driver in the mid-market in 2026

say the new merger reform law will have a positive impact on increased dealmaking

Australian M&A: Momentum

builds as the mid-market steals the spotlight

A multi-year uptrend reached a new peak in 2025, but it’s the mid-market surge that reveals where smart money is heading.

After two years of modest growth, Australian M&A hit its stride in 2025. Total cumulative deal value jumped 11% year on year to reach AU$143.7b, while volume climbed 8% with 1,132 transactions completed. This marked the strongest performance since this recent uptrend began in 2023.

The acceleration reflects improving business confidence, stabilising interest rates and pent-up demand from buyers. Additionally, many dealmakers may have expedited deal timelines to get ahead of new merger reform laws which came into effect on 1 January 2026.

Regardless, deal activity may be positioned for even greater growth through 2026. More than half (58%) of respondents plan to increase M&A investments in Australia over the next 12 months and another third (35%) say their activity will remain unchanged from current levels. This signals that sentiment is shifting from cautious optimism to genuine conviction in the year ahead.

Mid-market outperformance signals a strategic shift

The real story lies in the mid-market. In 2025, deal value surged 14% –reaching AU$20.9b – while volume rose 11% with 307 deals. This result ends a negative trend that began in 2022 and points to a fundamental change in sentiment towards the middle market. Investment intentions among dealmakers underscore this shift. For the year ahead, 71% of dealmakers say they will increase investment in the mid-market – 18% foresee major commitments and 53% say at least moderate investments will be made. This is in addition to the 25% who will at least keep their dealmaking in Australia unchanged from the past year. For active dealmakers, the message is clear: competition for quality mid-market assets will intensify. Those who move decisively will capture the best opportunities in what’s shaping up to be Australia’s most dynamic deal segment.

Mid-market opportunities are better in Australia, which leads us to focus on these investments in particular. There are more opportunities to transform businesses after acquisitions in this segment.

Managing Director, US PE firm

Opportunism

replaces long-term planning as dealmakers embrace agility

The Australian M&A playbook is being rewritten. The survey findings show dealmakers are no longer waiting for multi-year strategic plans to unfold –they’re striking when the moment is right.

Dealmakers overwhelmingly say their most recent investment into Australia was opportunistically driven (85%), based on market conditions and developing events. This sentiment has more than doubled since 2024, when only 40% answered the same way. Meanwhile, preference for pre-planned strategic acquisitions has declined sharply over the same period: dropping from 55% in 2024 to just 10% in 2026.

Far from signalling deal indecision, this shift shows a strong leaning toward adaptation among dealmakers. In a market still adjusting to higher rates, geopolitical uncertainty and sector-specific disruption, rigid long-term plans often miss the mark by the time they are executed. Opportunistic buyers can move faster, negotiate better terms and capitalise on temporary dislocations, whether that’s a distressed seller, a corporate divestment, or a competitor exit.

For dealmakers, this shift demands different capabilities. Speed matters most, and due diligence must be efficient, with financing lined up to move. It also means maintaining a constant deal pipeline rather than waiting for the perfect asset to emerge. In today’s market, the best deals aren’t necessarily the ones planned for – they are the ones dealmakers are ready to execute when opportunity knocks.

Australian M&A

3: Which of the following best describes your intentions with regard to investing/M&A into Australia

85%

say their most recent investment into Australia was opportunistic driven

10% preference for pre-planned strategic acquisitions (dropping from 55% in 2024)

Investment rationales

Figure 4: Which of the following best describes the rationale behind your most recent investment into Australia? (Select one)

Merger reforms: A friction dealmakers can work with

There is greater transparency when getting regulatory approvals. Although the process is expected to be longer, competition in Australian dealmaking markets can be controlled better.

Broad acceptance masks concerns about execution costs and timeframes.

Australia’s merger reform framework appears to be landing with less disruption than many feared, although it’s still early days. Somewhat surprisingly, almost 60% of respondents expect the reforms to ultimately increase dealmaking, while only 23% anticipate a decline. Another 18% see no material impact at all. This relatively optimistic view suggests that dealmakers have concluded the new rules are a manageable friction rather than a fundamental barrier.

Indeed, the real concerns aren’t about uncertainty, they are about execution. More than half (55%) of respondents say increased costs are the biggest negative impact of the reforms, while 43% point to longer deal timeframes. Notably, only 2% say increased uncertainty is a major problem, indicating the rules themselves are generally well understood even if burdensome. For dealmakers, this creates a straightforward calculus: deals will take longer and potentially cost more to complete, but the path forward is clear.

55% say increased costs are the biggest negative impact of the merger reforms

Currently, it appears that dealmakers are not treating the ACCC reforms as a stop sign, but more a signal to proceed with caution. It remains to be seen whether the new regime will materially impact dealmaking moving forwards.

James Beaumont, Partner, Pitcher Partners Melbourne

Merger reform

Figure 5: Now that the new merger reform laws are in place, how much do you think they will impact dealmaking in Australia? (Select one)

Refinement needed but framework largely accepted

While most dealmakers accept the reforms as they are, 65% believe the merger framework needs refinement: 18% call for major changes and 47% want at least minor adjustments. Only 33% think it’s working as intended, and none support reverting to voluntary notification.

Dealmakers also want broader consideration of merger impacts across employment, consumer outcomes and small business visibility, among other topics – all in recognition that ACCC reviews increasingly extend beyond pure competition analysis into industrial policy territory.

65% believe the merger framework needs refinement

Figure 6: What has been (or do you expect to be) the biggest negative impact of the new merger reform laws?

Slight adjustments would help all parties involved here. Completing transactions might not be completely seamless due to the complexities, but laws could be refined to make them clearer for deal preparation.

Figure 7: How would you describe Australia’s current merger oversight framework following the recent reforms? (Choose one)

CEO, Netherlands corporation

There is more clarity in markets about what regulators expect dealmakers to report. Notifiable deal expectations are clearer, so this will increase dealmaking somewhat in the coming months.

CFO, Australian corporation

Deal drivers:

Succession and strategy, not distress

Founder exits and divestitures will fuel a healthy pipeline of mid-market deals.

Succession planning tops the list of deal drivers in both the mid-market (42%) and broader M&A landscape (32%), signalling a wave of founder-led exits and ownership transitions that will define deal flow for years to come.

Indeed, baby boomer business owners who delayed exits during the pandemic and because of rate volatility are now moving while buyer appetite is strong. For acquirers, this creates a target-rich environment of established, profitable businesses with proven management teams and loyal customer bases.

Owners that prioritise the work that goes into preparing a business for sale can better respond to the market, avoiding or catching early issues that can potentially create delays, valuation misalignment or even deal failures.

Andy Hough, Partner, Pitcher Partners Sydney

32%

say succession planning tops the list of dealdrivers overall

42% say succession planning tops the list of dealdrivers in the mid-market

Divestitures rank as another major driver, reflecting active portfolio management as corporates and private equity sponsors rationalise holdings and sharpen strategic focus. These aren’t fire sales – they are a deliberate decision to exit non-core assets, unlock capital and redeploy into higherreturn opportunities. The presence of divestiture activity alongside succession deals underscores a market driven by strategy, not panic.

Debt availability further confirms the healthy tone. Transactions are being enabled by access to financing, indicating lenders are comfortable backing quality deals at reasonable leverage levels. This stands in stark contrast to the 2022–2023 period when financing constraints were a greater issue.

Investors and bankers are tipping that private capital players will step up their deployment of $US3.3 trillion ($4.9 trillion) in dry powder globally, while industries such as digital infrastructure, including the buying and funding of data centres, are expected to be particularly busy.

Driving deals

Figure 8: What will be the main drivers of M&A activity in 2026?

Succession planning

Divestiture of non-core assets

Availability of debt

Listed companies seeking growth via M&A because of low organic environment

Foreign dealmakers into Australia

Amount of capital to be deployed by Private Equity

More realistic value expectations of sellers

Stabilisation of global inflation

Lowering of interest rates

Valuation alignment between sellers and buyers

Market volatility due to international trade and geopolitical instability

Public-to-private deals

Distress driven (financially forced/insolvency)

Overall, the divestiture of non-core assets will become the focus. This would be the right time to get desired valuations. The market conditions are easing and might lead to better pricing during a sale.

CFO, Australian corporation

Divestiture of non-core assets would be the main driver in overall markets because companies want to restructure their organizations and maintain assets that are profitable in the longer term.

Partner, US PE firm

Risks and challenges: Regulation and geopolitical complexity take centre stage

The risk landscape for Australian mid-market M&A has shifted markedly in the past 12 months.

Regulatory change (45% of respondents) and global trade tariff volatility (40%) have emerged as the dominant concerns in 2026, rising to the top of an agenda still clouded by persistent inflation and interest rate pressures that continue to weigh on dealmaker confidence. This evolution reflects a market that has learned to navigate macro uncertainty but now faces a more complex policy environment.

The survey findings highlight these trends. Concerns around delays in government approvals for foreign investment more than doubled, rising from 15% in 2025 to 32% in 2026. This spike aligns with earlier findings that merger reforms are adding time and cost to transactions – but the foreign investment approval bottleneck appears even more acute. For cross-border buyers, dual track regulatory processes may create compounding delays that can stretch deal timelines by months.

Meanwhile, concerns about equity market volatility and access to capital have dropped sharply. Dealmakers have adjusted to the higher-rate environment, and debt markets have stabilised enough to support quality transactions.

Global trade tariff volatility adds another layer of complexity. This is particularly true for deals involving supply chain-dependent businesses or cross-border operations exposed to shifting trade relationships between major economies.

Challenges facing dealmakers

Figure 9: What are the top challenges facing mid-market dealmakers in Australia in the next 12 months? Select three.

Regulatory change

Global trade tariff volatility

Rising inflation

Rising interest rates

Delays in governmental approvals for foreign investment

Social and environmental activism or unrest

Financial collapse of companies

Volatility on equities markets

Difficulties with due dilligences process

Valuation gap between buyer and seller

Access to capital or financing

Unstable political environment at home

Corruption and reputational risk

Global trade tariff volatility added a layer of complexity, particularly for deals involving supply chain-dependent or cross-border businesses.

Valuations: The gap is closing but selectivity remains

Pricing tension eases as buyers and sellers find common ground.

Valuation remains the most common deal-breaker in Australian mid-market M&A – but the nature of the disagreement is shifting. The share of abandoned deals due to valuation expectation gaps fell from 32% in 2025 to 24% in 2026, suggesting buyers and sellers are finding it easier to reach agreement than in previous years.

Valuation gaps between buyers and sellers remains the primary sticking point, on par with disagreement on key commercial terms, but the confidence of respondents increases the likelihood that deals move from conversations to completed transactions.

Stephen Craig , Partner, Pitcher Partners Melbourne

believe vendor valuation expectations are realistic

Valuations

Figure 10: For opportunities assessed but ultimately not transacted, what best describes the reason(s) for not completing a deal? (Select all that apply)

expectation gap

This convergence is reflected in the sentiment. Most respondents (63%) believe vendor valuation expectations are realistic, with 20% calling them highly realistic. That leaves roughly one-third who still view expectations unrealistic to some extent – a meaningful minority but far from the overall frustration that characterised earlier periods of market dislocation. Fewer deals are being abandoned for not fitting the strategic plan, a signal that the plan is increasingly being written around the deal, not the other way around.

Valuations

Figure 11: To what extent do you believe vendor’s valuation expectations are realistic?

The

selectivity signal

That price gaps are narrowing but not disappearing signals that dealmakers are willing to engage but remain selective. Buyers will stretch for the right asset with the right growth trajectory, but they’re still walking away from overpriced targets without hesitation. For sellers, this means realistic pricing gets the deal done – but testing the market with inflated expectations will cost time and credibility without yielding better outcomes.

Sellers are more proactive in completing their own due diligence and they use outside expertise for this purpose. So, the valuations are somewhat more realistic now.

Spotlight on sectors

After years of technology, media and telecommunications (TMT) dominating mid-market deal flow, 2025 brought a decisive shift in the sector landscape with mining leading the charge. But as dealmakers look ahead to 2026, TMT is reclaiming its place at the top.

The in-demand sectors

TMT dominated activity for years, ceded ground to mining in 2025 but is now firmly back as the sector most expected to drive mid-market M&A in 2026, with a unanimous 100% of respondents pointing to it as the top growth area. Industrials and chemicals (98%) and energy, mining and utilities (98%) follow closely behind, reflecting strong dealmaker conviction in Australia’s industrial base and resources sector. Leisure (62%) and real estate (58%) round out the top five for anticipated deal flow, suggesting that consumer-facing and property sectors are also drawing buyer interest heading into 2026.

Sector watch

Figure 12: Which of the following sectors will see increases in mid-market M&A in the next 12 months? Which will see possible increasing distressed M&A in the next 12 months? (Select all that apply for each column)

point to the technology, media and telecommunications sector as being a growth area

Top 5 sectors for 2025

1. Energy, mining and utilities

2. Technology, media and telecommunications

3. Pharma, medical and biotech

4. Business services

5. Industrials and chemicals

The surprising outperformer

Perhaps the most striking finding is the near-total absence of distressed M&A expectations in the top three growth sectors – TMT, industrials, and energy each attract just 0–2% distressed sentiment, signalling that dealmakers view these as genuinely healthy, demand-driven markets rather than opportunistic plays. Leisure also stands out as a sector where a meaningful proportion of respondents (62%) expect active deal-making despite a moderate distressed overhang (38%), suggesting both strategic and opportunistic buyers are circling.

62% expect active dealmaking in the leisure sector

The distressed sectors

The picture sharpens considerably at the other end of the chart. Defence and government stand out starkly –both attract 0% expectations for increasing mid-market M&A, yet 100% of respondents flag them as areas of potential distressed activity. Pharmaceuticals, medical and biotechnology (94% distressed vs 6% growth), agriculture (88% distressed vs 13% growth), and transportation (87% distressed vs 13% growth) similarly show a yawning gap between low deal appetite and high distress expectations. Construction (80% distressed) and financial services (85% distressed) also remain firmly in the pressure zone, consistent with ongoing cost and margin challenges in those sectors.

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