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The Deal in Focus: Heads of M&A Survey 2023

Welcome to the sixth edition of our annual survey of corporate heads of M&A, which features more than 130 responses from Australia and New Zealand. 


The M&A outlook in Australia is proving resilient to the headwinds of global and local economic conditions. Activity won’t be at the boom levels of 2021, but most M&A leaders expect the number of deals they pursue to increase or remain stable over the next 12 months.

While there are clear challenges, most survey respondents are cautiously optimistic across each sector, with appetite for inorganic growth remaining steady. Respondents expect divestures to make a more regular appearance across deals in the next 12 months suggesting businesses are constantly reviewing their portfolios to ensure they are ‘match fit’ for whatever external market conditions might throw at them. 

Economic Outlook

There’s been a large shift in the economic factors most affecting M&A in 2023. More than half of this year’s respondents selected interest rate movements as a factor affecting their ability to successfully execute deals, up from only 38% of respondents in 2022. Global growth has slowed significantly despite China reopening its borders, with the risk of a recession in the United States, United Kingdom and Europe remaining elevated. The economic outlook will depend on the outlook for interest rates. Central banks walk a narrow path in many advanced economies, attempting to raise interest rates enough to contain inflationary pressures without slowing the economy too much.

Corporate leaders are continuing to build resilience in their organisations as they emerge from the long tail of the pandemic, the ongoing effects of the war in Ukraine, and current domestic economic variables. With uncertainty likely to continue, leaders need to get their organisations into shape, to the point where they can sustain other shocks and navigate market issues with a good degree of confidence.


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The valuation of assets is once again the biggest obstacle for M&A success. Almost three quarters of respondents say it’s one of their top five M&A challenges in 2023, a slight drop from 80% in 2022. Many deals are stalling due to an insurmountable gap as buyers are increasing their hurdle rates and, in some cases, taking a more conservative approach to valuation, while some vendors have yet to change their price expectations to reflect the current environment. 


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The expediting of synergy capture is a key priority for respondents in this year’s survey. This reflects the changing conditions as deals completed in more buoyant markets now need to deliver value, whilst facing headwinds. Delivering the expected synergies are a key element in most transaction business cases, yet 42% of the respondents indicated that this was the most challenging or second most challenging item to execute on. Businesses will need to develop appropriate change management plans and embed a culture of continuous improvement in the organisation, to ensure value continues to be delivered beyond transaction date. 


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Our survey showed 78% of respondents are highly confident they have a strong balance sheet with adequate cash reserves; however, the changing economic cycle has seen the financing of M&A as more challenging, with 22% of respondents identifying the status of debt markets as a challenge to M&A success (8% last year). 


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There is an evolution taking place around how environmental, social & governance (ESG) is understood in the context of corporate strategy, with companies increasingly leveraging ESG as a key source of value creation and a means to drive commercial growth. As a result, corporate strategies, ESG commitments, and M&A processes – which have traditionally been disconnected – are becoming intertwined across the deal lifecycle as ESG thematics are now shaping deal theses and infiltrating the decision-making space in M&A. 


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Industry focus
Industry focus
Power, Utilities and Renewables
Mining and Metals
Financial Services

The burning platform facing the Power, Utilities and Renewables (PUR) sector is now well understood in loungerooms and boardrooms alike, as escalating prices and unstable supplies drive governments to search for a leaner, greener solution. But have we left it too late to achieve an orderly transition of Australia’s energy sector? Time will tell, but it may well be our greatest enemy in solving one of our nation’s biggest challenges (and opportunities).  




Though just 40% of Energy, Resources and Industrials (ERI) respondents expect M&A activity to increase over the next year – a drop from 55% in 2022 – it’s likely a symptom of success. Mining and metals deals have been surging over the past six months, and M&A leaders seem divided on whether this hive of activity could get any busier. 







Financial Services Industry (FSI) respondents are somewhat more optimistic about economic conditions than the collective. But that optimism isn’t necessarily flowing through to the outlook for M&A activity. Only 22% of FSI respondents expect their organisation to pursue more deals in the next 12 months, compared to 45% survey wid e. In truth, the FSI market is in a state of flux relative to last year when early interest rate rises fuelled optimism among banks and insurers. As the big banks wind up most of the divestments prompted by the Royal Commission, the question remains: where will the next growth phase come from? 


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