Buyer power drives Aussie M&A deal protections

Author: Ashley Lee | Published: 9 Mar 2015

Buyers retain the upper hand in Australian private M&A, a survey of deal terms by King & Wood Mallesons has revealed.

A number of high-profile public deals closed in the market last year, including Saputo’s competitive takeover of Warrnambool Cheese & Butter and Woolworths South Africa’s acquisition of David Jones. That dealmaking enthusiasm seems to have carried over into the private M&A space, where King & Wood Mallesons’ DealTrends report observed a 31% increase in transactions from the previous year.

The report is based on Australian private M&A deals that the firm acted on between July 1 2013 and June 30 2014. It revealed that there is increasing competition for Australian assets, yet buyers are able to negotiate favourable terms. And they’re adding even more protection, often inspired by those seen in private equity (PE) and public deals.

Over the past couple of years, a key theme...