The global mergers and acquisitions market remains positive, despite deals generally taking longer to complete and some sectors being impacted by common issues, such as energy transition projects which are taking longer than expected.
Stephen Iu, a partner at leading independent law firm McCullough Roberston (McR), said his attendance at the recent International Bar Association Annual Conference underlined that the Australian experience largely mirrored trends across the world.
Mr Iu said a common theme among international colleagues was that sentiment for mid-market mergers and acquisitions remained positive across the globe.
He said the consensus was that the strength was driven by factors such as companies focusing on strategic growth or divestments.
“My sense is that, on the one hand, some organisations continue to focus on their core areas and so divest non-core businesses. On the other hand, acquirers have pressed on strategically or to enhance their business offerings.”
Mr Iu said generational transition was also a factor in a number of deals.
“There are owners and founders that have reached an age where they do not want to work in the business anymore, they have no succession plan and they are looking for an exit.”
“Many businesses are coming onto the market because of that,” he said.
Mr Iu said the mergers and acquisition activity was playing out against a backdrop of a sluggish energy transition process in numerous jurisdictions.
He said when talk started around the transition to renewable energy sources there was an expectation by some that it would be swifter.
“There was hope it would happen quickly, but as time has gone on, it’s taking longer than expected.
“(And) this is a common theme across most jurisdictions.”
Mr Iu said issues around regulations, project feasibility and approval times were common across most jurisdictions.
“It was interesting raising Australian observations and finding our contacts (at the conference) were sharing the same views from their jurisdictions.”
It is those international insights and experience which McR clients value from the full-service firm.
Mr Iu is part of a market-leading MCR mergers and acquisition team, based in Sydney and Brisbane, which has deep experience and global connections.
He said the team worked with many other independent foreign firms.
“Many of our clients are foreign and we work on deals with cross-border elements, so we have and need a great network of other independent firms. Our full service offering and independence are attractive to foreign law firms.“
“We are also deeply experienced in working with other jurisdictions, so we know how to communicate with foreign clients, and foreign law firms, about particular Australian legal issues.”
Mr Iu said as a destination for foreign investment Australia has its advantages.
“What makes Australian companies attractive is that we are a well-regulated country, so it lowers one of the risk factors when you’re a buyer,” he said.
Mr Iu said much of McR’s work was in the Food and Agribusiness; Resources and Renewables; Technology, Financial Services, Start-ups and Life Sciences sectors.
He said the firm was also taking a special interest in housing, especially Community Housing.
“Australia has housing issue and so that’s one sector that we will be focusing on.”
