New Zealand deals market outlook: M&A activity in 2024 and beyond

While deal activity has been slower than expected in 2024, there are positive signs on the horizon for the mid-market in 2025.

This is the key message delivered by BDO Deal Advisory National Leader Andrew Grace and BDO Deal Advisory Partners Andrew Beagley and Daniel Martin, who joined business journalist Madison Reidy to discuss the outlook for merger and acquisition (M&A) activity in New Zealand. Watch their discussion below to learn more about transaction trends in 2024 and predictions on what might be ahead for 2025. 

Key trends in New Zealand's deals market

While many parts of the deals market were relatively muted in 2024, there have been some significant trends playing out across the landscape - with more activity predicted in the new year. Key trends highlighted in our video include the following: 

• 2024 has been a slower year for M&A, with lower levels of activity. This is true of both the New Zealand deals market and in overseas markets. Macroeconomic factors are playing a key role in this, with deals taking longer to complete and, in many cases, not completing.

• Some sectors have seen more M&A activity than others. Sectors with more activity include SaaS and IT companies, infrastructure services, financial services and wealth management.  

• There has been less deal activity in the retail sector, which has been heavily impacted by cost of living challenges. Activity in the health and education sectors has also slowed down, likely impacted by government policy changes. 

• Valuations are being impacted by companies’ earnings, which have softened across a wide range of industries in 2024. 

• Private equity is growing in New Zealand, with new local firms being set up and some Australian PE firms establishing offices in New Zealand. 

• 2025 is expected to be more positive as confidence returns to the market. There will likely be more M&A activity, but it may take time for businesses to be able to meet valuation gaps. With a lot of dry powder stored up, private equity activity is also likely to increase next year.  

• Businesses looking into M&A activity need to be deal-ready. This includes having funding in place, conducting thorough due diligence, understanding the process, and having good advisers on hand to support.

For more on M&A activity, private equity, and the mid-market, reach out to BDO’s Deal Advisory team. And for a deeper dive on the outlook for private equity in New Zealand, stay tuned for our new video in 2025.