Super funds factor in M&As

Superannuation funds played a greater role in public merger and acquisition activity last year, according to an analysis conducted by law firm, Gilbert + Tobin.

In a review of takeovers and other forms of mergers and acquisition last year, the law firm pointed to the level of activity of superannuation funds predicted it was likely to increase in line with the growing scale of Australian superannuation funds.

Commenting on the company’s review, Gilbert + Tobin partner, Neil Pathak said that despite regulatory headwinds, 2018 had seen a distinct increase in activity for public M&A in Australia, with transaction activity at a seven year high resulting in over 49 transactions being announced with an aggregate transaction value of $48.7 billion.

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“There was a significant improvement in success rates, perhaps due to the sharp uptick in premiums paid,” he said. “Cashed up private equity firms were highly acquisitive, willing to deploy approximately $13.6 billion on targets in a range of sectors.”

The analysis said that interest from foreign bidders (especially from North America and Asia) was robust, with foreign transactions being substantially larger than domestic transactions.

It said the Financial Services Royal Commission had galvanised public scrutiny of large corporates and would embolden regulators including the Australian Securities and Investments Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC) to more proactively and aggressively scrutinise corporate activity in coming years.

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