Capital Markets & Investor Relations Australia
Welcome to the latest edition of Global IR Insights, where FTI Consulting's Australian Strategic Communications team shares intel from our global network in capital markets communication and what it might mean for Australia.
2025 M&A predictions to watch
Global M&A activity saw positive signs in 2024, with deal values up 10% from 2023. Notable transactions included Mars’ USD$35.9 billion acquisition of Kellanova and Verizon’s USD$20 billion acquisition of Frontier.
The Australian M&A market also hit a decade high, driven by several trends. Hostile bids surged to 22%, while foreign buyers dominated for the first time in over five years, with significant growth from Asia (18%). Metals and mining remained the leading target sector. Additionally, nearly 47% of bidders held direct interests in their targets at the time of deal announcements, a sharp increase from 23% in 2023.
Corrs?predicts 6 key trends for 2025:
With mandatory merger clearance reforms set in January 2026 and a transitional regime available from mid-2025, Australia’s regulatory landscape is becoming more complex. These reforms will likely increase the need for Australian Competition and Consumer Commission (ACCC) clearance and the ACCC's broader scope to oppose deals, adding to transaction timelines and risks.
These regulatory M&A shifts highlight the need for clear, timely communication with investors. As transactions become more intricate, clarity on timing, risks, and strategic positioning will be essential in maintaining investor confidence and aligning expectations.
CFOs lukewarm on reaching climate targets
Despite robust sustainability efforts, a recent?Ernst & Young survey reveals that many CFOs doubt their companies will meet their climate goals. Of 2,000 finance leaders surveyed, fewer than half (47%) feel “very likely” their organisations will achieve their net-zero targets.?Investor interest in sustainability remains high, yet 80% believe executives prioritise short-term gains over long-term climate goals.
With mandatory climate-related financial disclosures commencing in Australia in January 2025, companies will be required to disclose climate transition plans, including governance, strategy, risk management and emissions targets. Companies that see the disclosures as an opportunity to get ahead and increase business resilience—rather than just a compliance exercise—stand to gain the most. As climate reporting requirements intensify, transparent sustainability strategies are vital to building investor trust.?
Learn more about how to get ready?here.?
Guidance: Why “beat and raise” is becoming ever more important
A recent CFO Briefing by Bloomberg explored the art of earnings guidance and why CFOs are feeling the pressure to “beat and raise” their targets — especially when faced with today’s volatile market environment. Bloomberg explained that a company’s ability to meet guidance is seen as the best indicator of how rigorous and credible a management team can be.
Perhaps unsurprisingly, companies have become more conservative around giving guidance lately, revealing a clear trend towards “underguiding”. According to a recent academic study, companies providing "lowball" guidance typically see an increase in their share prices for up to four consecutive quarters.
With this in mind, providing realistic guidance while clearly delineating “controllables” versus “non-controllables” is the best way to maintain credibility with investors, as surprises can damage credibility.
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The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.?FTI Consulting, Inc., including its subsidiaries and affiliates, is a consulting firm and is not a certified public accounting firm or a law firm. FTI Consulting is an independent global business advisory firm dedicated to helping organisations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. FTI Consulting professionals, located in all major business centres throughout the world, work closely with clients to anticipate, illuminate and overcome complex business challenges and opportunities. For more information, visit www.fticonsulting.com.