The Australian M&A market has had a slow start to 2012, according to the latest Thomson Reuters M&A legal advisor review. The sector’s overall activity fell to $20.4 billion, in comparison to $40 billion in the first quarter of 2011. Australian cross border M&A activity totalled $8.7 billion, down 20 percent on the corresponding quarter in 2011. Outbound activity amounted to $1.6 billion, the lowest quarterly volume since the second quarter of 2009.

Freehills topped the legal advisor rankings in announced deals for the quarter. Partner Rebecca Maslen-Stannage said she was surprised by the fall in deal value across the sector and is optimistic that the next quarter will see an improvement. “I feel like there is a lot of activity in the market,” Maslen-Stannage said. “The investment banks in particular are seeming far more optimistic than they have in the past six to nine months. I can’t help feeling it’s going to be a strong next quarter.”

Ashurst (previously Blake Dawson) topped the table for completed deals in the quarter with almost $11,000 million worth of deals. Partner Marie McDonald said the Australian M&A market was still volatile and therefore getting deals over the line is still difficult. “Getting deals to close is still an issue,” said McDonald. “Many deals get announced but don’t go ahead, so we are very pleased to top the rankings on completed deals for Australia and the Asia Pacific (ex-Japan).”

McDonald expects the market to remain somewhat the same going forward as clients accept the conditions as the new standard. “The market we are in is here to stay,” she said. “There is no point waiting for things to change... I think clients are willing to accept this as the new norm and therefore are more willing to go ahead with deals.” 

Maslen-Stannage added that as a result of the volatility in the market more deals were happening faster once they were announced. “Because the market is still seen as volatile there is a lot of work being done before hand, but once the deal is public, they want to do it as quickly as possible,” she said.

Both partners expect more M&A cross border transactions in the future to be focused on the resources sector, agribusiness and food sector as well as the health sector. “We expect agribusiness and food are sectors to be busy this year and into the future as Chinese investors look to buy those assets in the future,” added Maslen-Stannage.

Thomson Reuters first quarter M&A legal advisor rankings

Deals announced first quarter 2012

 Deals completed first quarter 2012

 Announced league tables include all deals that were announced between January 1, 2011 and March 30, 2012 and of which Thomson Reuters was made aware.