The booming energy and resources sector is ensuring Australia remains attractive to overseas investment, according to law firm Allen & Overy.
Allen & Overy’s quarterly look at mergers and acquisitions, the M&A Index, ranked Australia 4th overall as a target of M&A deals worldwide, trailing only the USA, UK and China.
“The Australian economy has essentially punched above its weight in relation to attracting foreign investment,” Allen & Overy Sydney M&A partner, Michael Parshall said.
“Foreign investment in the resources sector continues to be active, although not all sales processes have made it through to completion.
“However, big ticket foreign investment has extended to a range of other sectors such as food and beverages.”
Mr Parshall said Australia was considered a ‘net seller’, having recorded 35 inbound deals, compared to 13 outbound deals over the past year, a trend likely to continue.
The index showed overall a 22 per cent increase in the volume of deals compared to the same time last year.
Globally, deal volumes were up just 3 per cent on the previous year.
“Whilst the statistics appear positive for Australia, the overarching trend is one of ongoing volatility, which is clearly demonstrated when comparing 2011 second and third quarter results in the Australian market where there has been a 26 per cent drop in volume of deals,” Mr Parshall said.
“This is not a tale of remarkable recovery, but one of considerable volatility.”
