In this episode, Tayla Johnston, a Partner in our M&A team is joined by fellow Partners Neil Millar and Mark Forman. They delve into the M&A Forecast 2025, discussing whether there will be a surge in activity for the year. They reflect on the trends and events of 2024, the factors influencing M&A activity, and the potential sectors to watch in 2025. This comprehensive discussion provides valuable insights for those interested in the future of M&A in New Zealand. 

[01:05] Neil begins by reflecting on the past year, describing 2024 as a bumpy and grumpy year with many deals starting but few completing due to lengthy negotiations and economic uncertainty. Neil, Mark and Tayla discuss the unusual nature of 2024, with many deals falling through and a less frantic end of year rush compared to previous years. 

[02:05] Neil and Mark discuss the global context, noting that 2024 was marked by 50 elections worldwide, including the significant US election. This political uncertainty, combined with regulatory and monetary policy uncertainties, contributed to a cautious approach by private equity clients. They observe that the end of the year saw a modest uptick in activity as inflation tailed off and interest rates dropped, leading to a busier run into Christmas. 

[04:44] Mark notes that 2025 has started off busier than the previous year, with deals initiated in November and December still progressing. He predicts that corporates will be quite active in M&A this year, driven by the need for growth and the sale of non-core divisions. Neil and Mark discuss the potential for private equity activity, noting that while private equity is generally agnostic to market conditions, they are currently seeing fewer opportunities. They highlight the importance of competitive tension in driving corporate M&A decisions. 

[08:10] The discussion shifts to the impact of U.S policies, particularly tariffs imposed by President Trump, on New Zealand businesses and M&A activity. Mark and Neil consider the potential retrenchment of North American investors and the influence of the “America First” policy on global investment patterns. They speculate on the long-term effects of these policies on M&A activity in New Zealand and the broader Asia-Pacific region. 

[09:45] Tayla brings the conversation back to New Zealand, discussing the Governments efforts to make investing in New Zealand more attractive through changes to the Overseas Investment Act. Mark explains that recent streamlining of the OIO process has made it quicker and easier to get consent, and further reforms are expected. Neil and Mark discuss the perception of the OIO process among international investors and the potential impact of proposed changes.

[13:43] Next they discuss the Commerce Commission’s recent decisions to block two significant deals in New Zealand and the potential implications for future M&A activity. They consider the influence of developments in Australia, where new rules require a holistic assessment of competition over a three-year period, and the possibility of similar changes in New Zealand.

[17:54] They discuss the sectors expected to be hot for M&A in 2025. Tayla, Neil and Mark agree that healthcare, technology, and financial services will continue to be active sectors. They highlight the success of the healthcare sector, using the example of Habit Health, and discuss the ongoing activity in financial services and technology, particularly in software. Mark also mentions the forestry and agriculture sectors, noting the impact of OIO renewable energy sector, predicting an uptick in M&A activity in 2025. 

Information in this episode is accurate as at the date of recording Wednesday, 12 February 2025.

Please contact Tayla Johnston, Neil Millar, and Mark Forman, or our Corporate team if you need legal advice and guidance on any of the topics discussed in the episode. 

Please don't forget to rate, review or follow MinterEllisonRuddWatts wherever you get your podcasts. You can also sign up to receive updates via your inbox here.