BCG report highlights evolving challenges and opportunities in Australian M&A market
Australian dealmakers will need to adopt a more targeted and disciplined approach to mergers and acquisitions as regulatory change, higher capital costs and persistent valuation gaps continue to weigh on transaction activity, according to new research from Boston Consulting Group (BCG).
BCG’s M&A Report 2026, identifies four key forces shaping the market in Australia: a changing regulatory environment, the growing influence of superannuation funds, macroeconomic uncertainty and a continuing disconnect between buyer and seller expectations.
According to the report, Australia’s new mandatory merger control regime and heightened foreign investment scrutiny are extending approval timelines and increasing execution risks for acquirers. At the same time, higher interest rates and lower growth expectations are widening valuation gaps, making it harder for buyers and sellers to agree on price and contributing to subdued deal volumes.
“The Australian M&A market remains challenging, but there are still attractive opportunities for organisations with a clear strategic rationale and the patience to execute effectively,” said Matthew Abel, Managing Director and Senior Partner at BCG.
“Success increasingly depends on preparation, valuation discipline and the ability to navigate a more demanding regulatory environment. The best dealmakers are focusing on quality opportunities rather than pursuing transactions for growth’s sake.”
The report also highlights the growing influence of Australia’s superannuation sector. Superannuation funds now hold more than A$4 trillion in assets and are estimated to own around 36 per cent of the ASX’s market capitalisation, increasing their importance in the outcome of major transactions.
“Superannuation funds are becoming increasingly important stakeholders in Australia’s dealmaking landscape,” said Gates Moss, Partner and Associate Director at BCG. “Acquirers need to be prepared to explain not only the financial merits of a transaction, but also its strategic value and broader impact on the Australian capital market.”
Despite the headwinds, BCG expects opportunities to emerge in sectors benefiting from long-term structural demand. Australia continues to attract strong investor interest in LNG, energy transition assets and critical minerals such as lithium, copper and rare earths, reflecting the nation’s role in global energy security and the resources transition.
The report also notes that upcoming changes to capital gains tax settings could encourage more privately owned businesses to come to market before July 2027, potentially creating a larger pool of opportunities for strategic and private equity buyers.
“While conditions remain difficult, businesses that take a long-term view, prepare early for regulatory scrutiny and remain disciplined about where they deploy capital will be best positioned to create value as the market evolves,” said Gates Moss.
