See our 2022 Takeovers + Schemes Review

Is it time for a roaring ‘20s of Australian M&A?

Gilbert + Tobin has released its 2021 Takeovers + Schemes Review, which examines 2020’s public M&A transactions valued over $50 million involving ASX-listed companies. The Review provides our perspective on the trends for Australian M&A in 2020 and what that might mean for you in 2021.   

The onset of the COVID-19 pandemic in March 2020 clearly had an initial chilling effect on M&A. However, as the Review highlights, the ensuing stock market and asset price falls created opportunities for those with financial capacity to engage in strategic acquisitions. This delivered a material increase in deal activity in the last quarter of 2020.

We are three months into 2021 and the market is showing strong signs that we are on the cusp of a roaring ‘20s of M&A. We expect that the combination of successful adaption of flexible and remote working, technology advances, cheap debt funding, rallying of financial markets and the rollout of vaccines will ignite increased deal activity throughout 2021.

Casting an eye back to public company takeovers and schemes of arrangements in 2020, the key themes included:

  • Activity - 42 transactions valued over $50 million were announced in 2020, up from 41 transactions in 2019. The aggregate transaction value increased significantly from $24 billion in 2019 to $32.8 billion, driven by two $5 billion plus transactions and a number of competing bids.
  • Increasing momentum - The number of deals announced increased each quarter, rising from seven in Q1 to 14 in Q4 reflecting increased confidence and deal activity.
  • Energy & resources revival - This sector made the greatest contribution to announced public M&A by both aggregate transaction value and number of deals.
  • Private equity - Despite being involved in a similar number of transactions as in 2019, overall private equity investment in public M&A fell from 44% in 2019 to 18% of aggregate transaction value in 2020. Two Australian superannuation funds made take-private offers to ASX listed targets on their own account rather than in consortium with private equity.
  • Deal structures - Takeovers, as distinct from schemes of arrangement, had a renaissance. Takeovers amounted to 45% of all deals, the highest percentage since 2015. This was perhaps an output of falling asset prices making agreement on price harder leading to more hostile bids in 2020. Schemes of arrangement continued to be the preferred structure for transactions exceeding $1 billion.
  • Foreign bids - Only 45% of transactions in 2020 involved a foreign bidder, the lowest in the last ten years. This was influenced by the tougher approach by FIRB which required all foreign acquisitions to be subject to review no matter the value and involved longer review times. Aggregate deal value for foreign acquirers increased to $21.9 billion, up from $19 billion in 2019. Bidders from Asia (especially Singapore but less so from China) were the most active, followed by acquirers from Europe.
  • Deal success harder - 70% of announced M&A transactions over $50 million in 2020 were successful, down significantly from 83% of transactions in 2019. Some transactions were disrupted by the COVID-19 pandemic whereas others failed due to the existence of competing bids.
  • Regulatory easing - Regulators generally recalibrated their priorities allowing themselves and the entities they regulate to focus on the impact of the COVID-19 pandemic.

Takeovers + Schemes Review 2021 - Key Highlights 

Set out below are the Key Highlights from Gilbert + Tobin's 2021 Takeovers + Schemes Review.

Despite the seismic impact of the COVID-19 pandemic, there was a slight increase in Australian public M&A activity in 2020. 42 transactions valued over $50 million were announced – up from 41 transactions in 2019 and down from the seven-year high of 49 transactions in 2018.  

The aggregate transaction value increased significantly in 2020 to $32.8 billion, up from $24 billion in 2019. However, 48% of the aggregate transaction value in 2020 was attributable to only two transactions, being Coca-Cola European Partners proposed $9.8 billion acquisition of Coca-Cola Amatil and Northern Star Resources’ $5.8 billion acquisition of Saracen Mineral Holdings.

The uncertainty caused by the onset of COVID-19 in March resulted in deal activity coming to a halt, with only one deal announced in each of April and May. However, as economic uncertainty lifted and the market regained its confidence, there was a flurry of deal activity commencing in June with eight deals announced. Indeed, the number of deals announced increased each quarter, rising from seven in Q1 to 14 in Q4, reflecting increased confidence and deal activity.

M&A is clearly on the rise with a number of potential multi-billion dollar deals already announced in the first six weeks of 2021, involving AMP, Bingo Industries, Vocus, Tilt Renewables and Tabcorp. The ingredients for M&A are present including business confidence, availability of finance and vaccine rollouts in full swing. In this respect, 2021 promises to be a very strong year for M&A.


2020 saw a renaissance in the use of takeovers for deals over $50 million. Takeovers comprised 45% of all deals, up from 17% in 2019. For the first time since 2015, the takeover / scheme split was close to 50:50.

20% of all deals with a value of over $1 billion (one in five deals) were structured as a takeover. This differs from both 2019 and 2018 where all transactions over $1 billion were done by scheme.

The shift towards takeovers in 2020 is likely, at least in part, to be an output of falling asset prices making agreement on price harder - a widening of the bid-ask spread – leading to more hostile bids (up from 5% of all transactions in 2019 to 26% in 2020).


Despite having funds to invest, private equity firms spent less on Australian public M&A in 2020. Private equity backed deals represented only 18% of aggregate transaction value, down from 44% in 2019 and 28% in 2018. That said, private equity remained active from a volume perspective, and were behind 24% of the deals by volume (10 deals), identical to 2019.

That said, anecdotally, private equity activity remains high. With confidence of good years to come (the roaring 20s again!), we expect that private equity investment in Australian public M&A will increase in 2021.

We also expect that private capital will continue to team up with private equity in 2021. To date, we have already seen CPE Capital joining forces with MIRA in a proposed acquisition of Bingo Industries as well as Ares Management agreeing to buy part of AMP’s unlisted markets business.


Energy & resources was the dominant sector for both deal activity and aggregate transaction value in 2020, with 14 deals representing approximately 37% of total deal value. The majority of these deals (nine out of 14) involved targets in the gold sub-sector.

The existence of competitive bids also boosted activity in the energy & resources sector, with competing bids for Cardinal Resources from Shandong Gold, Dongshan Investments, Nord Gold and Engineers & Planners Co.

Food, beverage and tobacco came in second by aggregate transaction value (30%), with real estate coming in third (9%). Food, beverage and tobacco, however, saw reduced deal activity with only one high-value target accounting for its strong performance for the year, being Coca-Cola European Partners’ proposed $9.8 billion acquisition of Coca-Cola Amatil.

The second most prolific sector by number of deals was financials with eight deals (representing 19% of total volume), followed by the professional services sector.


There was a significant decline in announced foreign transactions for ASX listed companies in 2020, with foreign bidders accounting for only 45% of transaction volume in 2020, the lowest in ten years. This outcome is likely attributable to the tougher foreign investment regulatory settings requiring all foreign acquisitions to be subject to review no matter the size and longer review times. It could also be a function of the difficulties of cross-border deals in a pandemic where basic due diligence like site visits can be difficult, if not impossible.

Despite the tougher foreign investment regulatory settings, the aggregate transaction value of foreign investment increased from $19 billion in 2019 to $21.9 billion (the Coca-Cola Amatil / Coca-Cola European Partners deal contributing almost half that amount) and four of the five transactions exceeding $1 billion involved a foreign acquirer. The sectors of greatest interest to foreign bidders were energy & resources (seven transactions) and professional services (three transactions).

Success rates for all announced foreign public deals over $50 million plummeted from 87% in 2019 to 47% in 2020. This was an all-time low in the almost 10 years we have been publishing this Review. This may seem a dire statistic for foreign bids. However, it can be partly attributed to a combination of some contested bidding situations in which foreign bidders were out bid by other foreign bidders (eg UAC Energy missed out on Infigen to Iberdrola and three unsuccessful foreign bidders for Cardinal Resources) and the general lower success rate of all deals. The tougher foreign investment regulation environment also did not help. That said, no listed company M&A deal failed for want of getting FIRB approval (at least not any deals that were announced).

Foreign bids in 2021 will continue to be subject to a more rigorous foreign investment regime and increased FIRB scrutiny on certain types of businesses (more on this in Chapter 4). However, we do not consider that this will impede foreign acquirers from being successful except where issues of national security arise.


The preference for cash consideration significantly decreased in 2020, with only 62% of transactions offering all cash consideration (down from 83% in 2019, which was the highest percentage identified in the past ten years). Perhaps this was borne of a desire to preserve cash to ensure balance sheet strength.

The majority of bidders continued to fund their acquisitions using at least a portion of existing capital. However, the number of transactions which were funded by new acquisition facilities decreased from 62% in 2019 to 27% in 2020. This may have been heavily influenced by the uncertainty present throughout the majority of the year as businesses sought to maintain conservative balance sheets.

In our view, the incidence of more scrip only transactions and fewer leveraged deals in 2020 was an aberration due to natural conservatism arising in uncertain times. However, now that confidence is returning and private equity activity remains high, we expect to see a return to more all cash deals and greater use of debt acquisition funding.  


In addition to private equity, there was a notable increase in the involvement of superannuation and pension funds in Australian public company M&A in 2020.

In particular, Aware Super sought to take an ASX listed company private by itself, rather than joining a consortium including private equity, but was ultimately out bid by Uniti in the contested bidding for OptiComm. AustralianSuper also made a non-binding indicative offer for New Zealand infrastructure company Infratil.

With approximately $3 trillion of assets under management and growing via Australia’s compulsory saving scheme, superannuation funds will have a greater need to invest (and invest larger amounts per investment). This will inevitably lead them to listed markets. Indeed, as superannuation funds upscale their internal capabilities, we have no doubt that we will see a greater involvement of these investors, both by themselves and as part of consortiums, in Australian public markets in 2021 and beyond.