Mergers & acquisitions (M&A) volumes are holding up, both internationally and in New Zealand, despite an unexpected period of geopolitical and economic volatility.
Domestically, several large transactions completed or kicked off late last year, including the sale of Sistema Plastics to Newell Brands. Deal momentum is continuing this year, with ANZ's sale of UDC Finance to HNA Group for $660m, Spark's $22.7m takeover offer for TeamTalk, Tenon Clearwood LP's purchase of Tenon's New Zealand-based Clearwood operations, and the $197m acquisition of Tower by Fairfax Financial, now being contested by Suncorp.
This publication explores likely trends and issues in the New Zealand M&A market this year.
Expected trends in 2017:
- A gap between the number of cashed-up investors and the availability of good quality New Zealand assets will see a sellers' market in 2017, resulting in strong price expectations, but without a return to the irrational exuberance of 2007
- Robust private equity (PE) interest driven by cashed up PE firms on both sides of the Tasman
- An improved Overseas Investment Act consent process will result in less competitive advantage for domestic buyers in contested transactions as shorter timeframes reduce the regulatory hurdle of gaining Overseas Investment Office (OIO) consent
- Iwi will be more active dealmakers as they look to diversify their investments, and
- A slow-down in activity as the New Zealand general election, scheduled for 23 September, nears, with a potential burst of post-election activity to follow.
Chapman Tripp has also released a supplementary publication, Mergers and Acquisitions - China/New Zealand trends and insights.
Expected trends in this publication include:
- New currency controls in China may give New Zealand a competitive edge as an investment destination as investors look to smaller markets like New Zealand
- Chinese investment is diversifying, with increased investment expected in sectors including tourism, financial services, and value added food and nutraceuticals, and
- In the absence of TPP, China may seek an increase in New Zealand's OIO consent thresholds.
View the video media release for that publication here.
Chapman Tripp's national M&A team partners with clients to successfully execute some of the biggest, most complex and challenging transactions in New Zealand. Our team has advised on more M&A work than any other New Zealand firm, including many of New Zealand's most significant cross-border deals.
The information in this article is for informative purposes only and should not be relied on as legal advice. Please contact Chapman Tripp for advice tailored to your situation.