Australia Faces Record $40 Billion in Failed M&A Deals in 2025

In 2025, Australia experienced an unprecedented collapse of nearly $40 billion in major mergers and acquisitions (M&A) deals, marking the highest level of failed transactions in 15 years. This surge in unsuccessful deals is attributed to a combination of stringent regulatory environments, valuation disagreements, and heightened caution among corporate boards and investors.

Key Failed M&A Transactions

One of the most notable failures was the $18.7 billion bid by a consortium led by the Abu Dhabi National Oil Company (ADNOC) to acquire Santos, Australia's second-largest gas producer. The deal was abandoned due to disagreements over potential capital gains tax liabilities and anticipated challenges in obtaining approval from Australia's Foreign Investment Review Board (FIRB). This bid, which would have been the largest all-cash offer in Australian history, underscores the complexities of navigating Australia's regulatory landscape.

In August 2025, Peabody Energy withdrew its $3.8 billion bid for Anglo American's Queensland coal assets. The withdrawal was influenced by regulatory challenges and valuation mismatches.

Earlier in 2025, Brookfield and Bain Capital abandoned their $2.5 billion bid to acquire Insignia Financial. The deal faced obstacles related to regulatory approvals and valuation disagreements.

In 2024, BHP scrapped its $49 billion offer for Anglo American after the latter rejected the bid multiple times, citing issues with the proposed deal’s structure.

Earlier in 2024, merger discussions between Australian energy companies Woodside and Santos collapsed over valuation disagreements.

In 2023, Brookfield and MidOcean’s $10.6 billion offer for Origin Energy failed after securing only 69% shareholder approval, falling short of the required 75%.

U.S.-based Albemarle withdrew its $4.39 billion bid for lithium company Liontown in 2023 due to rising complexities.

In 2022, KKR pulled its $13 billion offer for Ramsay Health Care, citing poor financial performance and limited access to important financial data.

Regulatory Environment and Its Impact

The Australian Competition and Consumer Commission (ACCC) introduced new mandatory pre-approval rules effective January 1, 2025. These rules require companies to seek prior clearance from the ACCC for significant mergers, aiming to prevent the entrenchment of market power. This reform aligns Australia's M&A laws with those of other developed countries and enhances the ACCC’s ability to detect and act against anti-competitive mergers.

The introduction of these stringent regulatory measures has lengthened approval processes and increased deal risks. Legal and financial advisers note that these processes not only slow down transactions but also heighten tension and cautiousness among buyers and boards, undermining momentum and contributing to failed agreements.

Social and Economic Implications

The surge in failed M&A transactions has several implications:

• Investor Confidence: The high rate of deal failures may deter both domestic and international investors, potentially leading to reduced capital inflow into the Australian market.
• Corporate Strategy: Companies may become more cautious in pursuing large-scale mergers, opting instead for organic growth or smaller, less complex acquisitions.
• Regulatory Scrutiny: The increased regulatory oversight reflects a global trend towards scrutinizing large mergers to prevent monopolistic practices, which can have both positive and negative effects on market dynamics.

Conclusion

The unprecedented level of failed M&A transactions in Australia in 2025 highlights the challenges posed by a stringent regulatory environment and the need for companies to carefully navigate these complexities. Balancing regulatory oversight with facilitating business growth is essential to ensure a healthy M&A environment in the future.