The market is experiencing a significant uptick in deal activity globally. After a period where markets weren't rewarding companies for doing deals, that dynamic has changed. This is flowing through to Australia, with cross-border transactions now accounting for 61% of all announced M&A value in 2025 year-to-date, up from 49% in 2024 - the first time in eight years that cross-border activity has reached such prominence.
Inbound Surge: An Evolving Landscape
Most of this increase has been in inbound M&A, reflecting fundamental shifts in how global investors view the Australian market. Inbound deals represent 46% of total deal value in 2025 year-to-date, up from 30% in 2024, with average deal sizes up approximately 20%, signalling a shift toward larger, more transformative transactions.
While the US, Japan, Canada, the UK and Singapore remain the dominant sources of capital, there is noticeable evolution over time.
Canadian investment continues to rise year-on-year, from strategic acquirers in mining to pension funds ramping up investment in Australian infrastructure and agriculture. Middle Eastern sovereign wealth funds, originally focused on agriculture and food security, are now broadening their investment remit for Australia.
Chinese investment has declined from historical peaks to around 1% of inbound value in 2025 year-to-date, reflecting geopolitical tensions and FIRB's new risk-based approach to scrutinising sensitive sectors where Chinese investment has historically concentrated.
Perhaps most striking is India's emergence as a significant investor, accounting for 12% of inbound M&A value in 2025 year-to-date compared to a historical average of less than 2% over the past decade. Thissurge appears linked to deepening bilateral ties and converging regionaltrading and security interests.
Outbound Caution: A Mixed Scorecard
While inbound activity has accelerated, outbound M&A has declined to 15% of total deal value in 2025 year-to-date, down from 19% in2024. Australian companies remain active offshore, but public market investors reward deals close to the core while penalising overreach.
Successful outbound transactions share: proximity to core business, clear pathways to synergies and proven integration track records.
Australian outbound investment is increasingly concentrated in developed markets, with the US, UK and Canada accounting for 75% of outbound value in 2025 year-to-date. Australian bidders remain active in Asia-Pacific, though these tend to be smaller deals.
Activity concentrates in sectors where Australian companies can compete globally. Mining remains dominant, as do companies servicing the sector such as Orica and Dyno Nobel.
Building materials and packaging companies have pursued offshore expansion, particularly into North America, with varying outcomes. Timing and industry cyclicality continue to influence short-term performance and market perceptions, even where transactions are strategically sound for the long term.
Technology remains a key area, with software leaders WiseTech and Xero each executing their largest-ever acquisitions this year to transform their US presence.
Regulatory Environment: A Major Overhaul
Australia's M&A framework is entering a new phase. FIRB has been overhauled in 2024-25, adopting a two-tiered risk-based approach that delivers greater transparency and speed for low-risk sectors while intensifyingscrutiny of critical minerals, infrastructure, defence and sensitive data transactions.
The most extensive reform to Australia's merger regime in decades is also approaching, with mandatory notification and suspensory rules requiring longer deal planning, more detailed documentation and pre-notification consultation. While the reforms should bring more structure and certainty, the additional time and cost could deter some bidders.
The Outlook: Sustained Momentum Despite Uncertainty
Despite persistent geopolitical uncertainties, global markets have demonstrated resilience. Australia's strong economic fundamentals, political stability and distance from many global flashpoints means it is well placed to attract ongoing international interest and capture capital inflows.
