A 45% rise in overseas money hitting Australia mergers and acquisitions has offset a fall in local investment, according got AVCAL (Australian Private Equity and Venture Capital Association) numbers.
The total deals and private placements completed in the year to the end of June was at similar levels to the previous year, although a surge in new deal announcements in the latter part of the financial year suggests a stronger year ahead.
The 27% decline in the value of domestic activity was offset by the increase in inbound deals, which made up almost half of total deal value.
“The surge in deal announcements in the last quarter … suggests that after several years of muted activity there are signs of recovering appetite for corporate deal-making, from strategic acquisitions to buyouts,” AVCAL says in its Market Observations report.
The number of deals completed was down by 2% while the value of deals was also marginally lower by just under 4%, with a total transaction value of $52.4 billion.
The value of inbound transactions was $25.2 billion.
This chart shows the value of deals, both overseas and local investments:
Asia and North America were the most active sources of inbound investment.
Canadian buyers were involved in three of the year’s ten largest deals, while the US contributed the most number of deals of any foreign country.
Asian buyers, particularly Chinese and Japanese companies, showed continued interest in the energy and resources sectors.
The largest deals of the year included the $3.4 billion takeover of Commonwealth Property Office Fund by DEXUS Property Group and the Canadian Pension Plan Investment Board, and the $2.6 billion acquisition of Aurora Oil and Gas by Canada-based Baytex Energy Corp.
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