It is likely that the next 12 months will be shaped by some forces operating simultaneously: a deal market that is open but selective; a November election that introduces meaningful policy uncertainty; and a global geopolitical dynamic that continues to define how capital flows into and around our market.
The deal market: momentum with discipline
The current M&A environment is best described as constructively cautious. There is genuine appetite, but it is concentrated and disciplined. The headline numbers are encouraging. Deal volumes improved about 15% in 2025 vs 2024. Trade buyers drove the majority of that activity.
Quality assets in defensive and high-growth sectors command strong attention — health care, energy transition, digital infrastructure, consumer staples with strong brands and technology businesses with proven international growth stories are all attracting strong interest.
New Zealand is on the international acquisition radar in a serious way. For parties sitting on capital, the current environment is not one for hesitation. Assets that offer genuine quality are being competed for.
The sale of Fonterra’s consumer division to global giant Lactalis for $4.2 billion, the sale of a 75% stake in Spark’s data-centre business to Pacific Equity Partners and the sale of Tāmaki Health to TPG (all deals that Jarden advised on) are clear examples of transaction within sought-after sectors.
Where deals are proving harder is equally clear: businesses with cyclical earnings profiles, concentrated customer bases, or exposure to sectors where the economic recovery has been uneven are facing buyer scrutiny that is sharper than sellers are accustomed to.
What to expect, and what to watch for
The next 12 months will not be linear.
Interest rates
New Zealand has come through one of the most dramatic monetary policy cycles in its modern history. The Official Cash Rate peaked at 5.50% and was then cut aggressively through 2024 and 2025 — 325 basis points in total — landing at 2.25% by November 2025, where the Reserve Bank has kept it since. Funding costs have come down.
But businesses that have been waiting for rates to fall before refinancing, recapitalising or making strategic moves should not assume there is unlimited time. Those who plan significant debt-funded transactions must stress-test structures against a rate path that could be higher in two years than it is today.
Quality assets in defensive and high-growth sectors command strong attention — healthcare, energy transition, digital infrastructure, consumer staples with strong brands and technology businesses with proven international growth stories are all attracting strong interest.
Geopolitical risk
For much of the past decade, geopolitical risk was something that featured in the risk register but rarely changed a decision. That is no longer true- geopolitical risk has now moved from a macro concern to a line item in deal models and capital expenditure planning.
Foreign interest
Inbound foreign interest may make a difference. The weaker New Zealand dollar makes local assets comparatively affordable for offshore buyers with hard currency. The streamlining of the Overseas Investment Act consent process and other reforms targeting foreign investment have expanded the pool of offshore capital that can flow into New Zealand assets.
The election: a known unknown with real consequences
The election on November 7 is one of the largest variables in the 12-month outlook. Historically we have seen a softening of deal activity in the 8-12 weeks immediately before polling day and we expect that pattern to compress the effective deal window in the second half of 2026.
More profoundly, the policy differences between the two potential government coalitions are material for capital markets, and the election outcome will have direct consequences for M&A activity. There are very different propositions as to the preferred foreign investment framework, privatisation or asset recycling by the Government, tax settings and infrastructure public/private collaboration, to name a few.
The practical implication for clients is not to paralysis-test every decision against election scenarios, but to be clear about which transactions are election-sensitive and which are not. Most transactions should proceed regardless of who governs, albeit with potentially different considerations. The deals that are genuinely election-contingent — large infrastructure PPPs, Crown-adjacent asset sales, transactions that require specific regulatory settings — need to be assessed with more granularity.
Silvana Schenone says New Zealand is on the international acquisition radar in a serious way.. Photo / Babiche Martens
The Options Framework: how to think about acting now
Pulling this together into practical guidance: the next twelve months present a window that is genuinely open, but it will not be uniformly open for everyone, and it will not remain static. The environment we operate in rewards preparation, flexibility and decisive execution when conditions align. It does not reward waiting for certainty, because certainty is not on offer.
For sellers, the conditions are as supportive as they have been in several years. Sellers who are ready should be running processes and, if they are two years from ready, they should be using this period to build the story — the earnings quality, the growth potential, the structural strengths — that will command a premium when they do come to market.
For buyers, the discipline of the past two years has created real opportunity. Assets that would have been competed away at peak multiples at the beginning of the decade, are now available at more rational prices. The parties that are prepared to be flexible on structure — including mechanisms to properly allocate risk — will complete acquisitions that more rigid competitors will miss.
For boards and management teams navigating the broader strategic question — grow, acquire, divest or hold — the best advice is that the environment rewards conviction and preparation. The clients who are doing this well have a clear view of what their business is worth, what it would be worth to a buyer, and what it would cost to build versus buy the capabilities they need. They are in active conversation with advisers. They are running the scenarios. And they are ready to move when the moment presents itself, rather than spending that moment trying to get organised.
The next 12 months will test New Zealand capital markets — through an election, through continued global uncertainty, through a rate environment that could yet surprise. But the fundamentals that make this market attractive have not changed: quality assets, strong institutions and a legal and regulatory framework that international capital trusts.
The question is not whether there is opportunity. There is. The question is who is best positioned to act on it.