Australia M&A Outlook 2026: Foreign investors snap up 45 per cent of deal value as local CEOs plan acquisition spree

Monday, 23 February 2026

Global investors poured into Australia in 2025, with inbound deals representing 45 per cent of total deal value, up from 30 per cent a year earlier, as local CEOs signal strong appetite for deals that transform business models, not just grow market share.

Released today, PwC Australia's M&A Outlook 2026 found Australian deal value reached US$79.5 billion (down 8 per cent YoY) and volume fell to 1,285 deals (down 8 per cent), yet strategic intent remains high. More than half (52 per cent) of Australian CEOs are planning major acquisitions in the next three years. Of these, 36 per cent are explicitly targeting new capabilities and 27 per cent looking beyond their core sector.

Kushal Chadha, Deals Leader at PwC Australia, said Australian dealmakers are well-positioned heading into 2026.

"The appetite is there and increasingly, it's appetite for deals that genuinely transform businesses. CEOs aren't just chasing scale, they're targeting capabilities and technology that will define how their companies compete in the future,” he said.

Where the money went in 2025

Energy, utilities and resources (EUR) and financial services dominated headline deal value, combining for more than 70 per cent of total activity. EUR alone jumped from 25 per cent to 46 per cent year-on-year, as buyers paid premiums for assets with predictable revenue streams and energy transition exposure.

By deal count, activity was broader. Industrials and Consumer together represented 45 per cent of transactions, driven by succession planning, intergenerational wealth transfer, and founders reassessing their options amid technological change.

Inbound investment surged, with US, Canadian and Japanese capital leading. Brookfield and GIC's acquisition of National Storage REIT and CC Capital and OneIM's scheme for Insignia Financial were among the standout transactions.

Private equity buyouts rose 32 per cent in value to US$30.5 billion across 95 deals – renewed momentum after subdued activity following the 2022 peak.

"The greenshoots for 2026 are here: mid-market deals are getting done, international capital is flowing in, and private equity is showing promise,” Chadha said.

A new approval environment

Australia's regulatory environment for dealmaking shifted in 2025, with reforms designed to bring greater structure and certainty, while also demanding more from dealmakers upfront.

From January this year, certain transactions require ACCC notification and clearance before completion – the most significant merger control reform in decades. Foreign investment reviews have also become more nuanced, with deals involving critical infrastructure, minerals, technology or sensitive data facing higher scrutiny.

The IPO market reflected similar selectivity. Australian listings rose 37 per cent (67 to 92), with Virgin Australia's re-listing trading above issue price in early 2026 a sign of a receptive market. The contrast with global markets is notable: while US IPO value rose 25 per cent to US$34 billion driven by AI and tech issuers, Australia's recovery favoured smaller, pragmatic listings from profitable businesses.

"Australia's IPO window has opened, but it's a different story to the US – we're not seeing big tech floats. What is getting done, in both IPOs and M&A, are well-prepared transactions where teams have engaged early and planned for longer timelines. That discipline is paying off,” Chadha said.

Read the full report here.

Looking ahead

Five predictions for 2026:

1. Capability deals will outpace scale deals. More than a third of CEOs are seeking new capabilities through acquisition, and 27 per cent are looking beyond their core sector. Deals designed to transform business models will increasingly outpace those focused purely on market share.
2. Deal structures will keep evolving. Minority stakes, staged investments and partnerships are becoming the norm as buyers seek optionality and sellers seek flexibility.
3. Private equity will shift from buying to selling. Sponsors face liquidity pressure on long-held assets. Expect accelerated exit activity, particularly in the mid-market, as pricing expectations reset.
4. Energy transition and digital infrastructure will lead deal flow. Data centres, grid infrastructure and storage assets remain firmly in focus, with buyers paying premiums for predictable revenue and long-term structural exposure.
5. Japanese investment in Australia will grow. Nine per cent of Japanese CEOs plan to invest in Australia in the next 12 months – nearly double the US figure. Energy, infrastructure and defensible mid-market assets are the likely targets.