For a market that is traditionally second half-heavy in M&A activity, Australia’s 1H26 performance has been surprisingly strong despite global volatility, even after some high-profile deals suggested at the beginning of the year failed to materialise.

“We’ve had a relatively robust period of M&A so far this year, despite the backdrop of geopolitical and macroeconomic uncertainty,” said Nick Brown, co-head APAC M&A at UBS.

“We are seeing strategic and financial players actively exploring M&A, and funding markets are supportive.”

This year started with high hopes of mega-deals, including  SGH and Steel Dynamics’ AUD 13bn (USD 8.9bn) takeover proposal for Australian steelmaker BlueScope, and Rio Tinto’s potential merger with Glencore. but neither progressed. Rio Tinto announced it had no intention of bidding not long after revealing its was considering such a move., while prospects for the BlueScope deal became “very low”, as Mergermarket reported in May.

Yet dealmaking remained resilient.

Australia still recorded USD 52bn of M&A volume across 451 deals in 1H26, up 23% year-on- year, according to Mergermarket data. It was slightly below the USD 52.7bn recorded in 2H25 and among the country’s strongest first-half performances, trailing only 2007 (USD 64.2bn), 2011 (USD 74.8bn) and 2021 (USD 66.4bn).

As Brown pointed out, deal activity has been broad-based with “particular momentum within the infrastructure, industrials, and resources sectors.”

Cross-border deal flow remains strong, “highlighted by interest in Australian companies from North America,” he added.

Among the top 10 announced deals, three are in the mining sector – Anglo American’s up to USD 3.875bn sale of its Australian steelmaking coal business to Dhilmar, gold miner Regis Resources’ acquisition of Vault Minerals insurance for USD 3.8bn, and Yancoal’s USD 2.4bn acquisition of Kestrel Coal.

Mining remained as the largest sector by volume in 1H26, similar to 1H25, recording USD 13bn across 53 deals.

The largest deal in the half is insurance broker Steadfast’s indicative AUD 6 per-share scheme offer from US wholesale insurance distributer Amwins and its backer Dragoneer Investment, giving the company an enterprise value of AUD 7.7bn.

The AI infrastructure boom, a key driver of global M&A and financing activity, has also come through to Australia, according to Brown. “We are seeing large funding tasks and M&A in the datacentre space,” he said.

“And then sectors with second order impacts have also been active, including in the energy and broader infrastructure spaces, as well as in relation to critical minerals.”

Sponsor activity galore 

In contrast to 2025, when financial sponsors returned to buyouts with less exits, the first half has seen sponsor activity picking up across all fronts, particularly with exits.

“We are seeing real impetus from sponsors to exit portfolio companies in advance of a spate of expected fundraising activity in the next 12-18 months, particularly from the domestic funds,” said Simon Marrison, managing director and head of financial sponsors at Rothschild.

Sponsor exit volume for the half reached USD 8.6bn from 17 deals, up more than 75% from 2H25.

Four of the 10 biggest deals are sponsor exits, including Permira’s sale of I-MED Radiology to Jardine Matheson for AUD 3.4bn (USD 2.4bn), EMR Capital’s exit of Kestrel Coal, Bain Capital’s sale of Estia health to Stonepeak and more recently, TPG’s sale of Made Group to Danone.

Sponsor buyout volume worth USD 9.97bn across 31 deals outperformed the USD 5.5bn in buyout activity across 48 deals in 1H25. This is the second highest first half total on Mergermarket record after 1H21.

The largest announced buyout still in play is IFM investors’ USD 4.5bn bid for listed toll road operator Atlas Arteria. The most competitive deal would be the ongoing bidding battle for advertising company oOh!media, which has received indicative proposals from Pacific Equity Partners, I Squared Capital and Bain Capital.

Elevated levels of “public to private” activity are driven by financial investors “attracted to companies with attractive earnings and growth profiles, and also situations where share price volatility have created opportunities,” said Brown.

According to Marrison, core-plus infrastructure investors have been particularly active “partially because their portfolios are not as extensive as their private equity counterparts, but also because the current economic climate favours deployment into more defensive assets.”

Deals in the pipeline 

Still, the pipeline of prospective transactions eclipses announced deal activity, with clusters of assets coming to market.

In Australia’s healthcare sector for example, multiple radiology and clinical trial businesses are coming to the market, including Infratil’s Qscan, Allegro’s Perth Radiological Clinic, Healius’ Agilex Biolabs, Quadrant Private Equity’s Southern Star Research as well as Blackstone’s Nucleus Network.

There is also a growing pipeline in renewables, including GreenPoint Energy, the rebranded Equis Australia assets including batteries and wind farms, BlackRock’s Akaysha Energy, and I Squared’s remote renewable energy business Octa.

“Parties are navigating geopolitical and macroeconomic uncertainty, which can lead to bid-ask spreads that can require time or creative solutions to resolve,” Brown said

Instead of overdue exits, Rothschild’s Marrison said his team would focus on “trophy assets” in private equity portfolios for continuation vehicle (CV)  advisory opportunities.

“CV activity in Australia remains under-represented relative to the US and EU markets,” he said.

“We see a real opportunity for domestic funds to become more active in this space in the next 12 months, as a way for GPs to retain their trophy assets for longer while simultaneously facilitating DPI.”

The trend becomes evident in GP-led CV, now the fastest-growing segment of the secondary market, according to Coller Capital.

“GP-led secondary deals are more dominant on single asset continuation vehicles (CV) than multi-asset, with GPs using such CVs to offer liquidity and capture longer-term growth,” said David Hallifax, the firm’s head of Australia and New Zealand private wealth distribution.

“What used to be a niche strategy has now become more mainstream,” he noted.