Morgan Stanley says ‘urgency’ drives Australia M&A to record

Australia has notched its biggest quarter for deals on record, as a sense of urgency grips companies positioning themselves for a vibrant post-pandemic economy, according to Morgan Stanley.

The A$70.9 billion (S$69.41 billion) in mergers and acquisitions (M&A) transactions targeting Australian companies since July began is now the highest total of any quarter dating back to at least 1998, according to data compiled by Bloomberg.

The record sum was bolstered Monday as Spark Infrastructure Group agreed to a takeover offer from a consortium led by KKR & Co valuing the energy infrastructure investor at US$3.7 billion.

The flurry of tie-ups defies worries over the potential effects of Covid-19 restrictions and rising geopolitical tensions on dealmaking. Faith in a rebound driven by confidence among consumers and businesses, government stimulus globally and hope for successful vaccination campaigns have convinced executives that asset prices will continue to rise, according to Morgan Stanley.

“With this conviction comes an urgency to deploy capital and take action upon opportunities now,” Richard Wagner, chief executive officer of Morgan Stanley Australia, said in an interview. “We see no sign of activity slowing down.”

-Business Times

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