An increased number of overseas acquisitions by Australian corporates and the continued rise of Asia are just some of the predictions for 2011 outlined by Freehills M&A partners Tony Damian and Neil Pathak.

According to the partners, 2011 will see resources M&A continuing to dominate the landscape: “We expect to see continuing high levels of activity in coal, gold and copper, uranium and oil and gas,” they said. “We also expect a diverse range of acquirers.”

They predict intense interest from Asia to continue, particularly from China, “but we also suspect one or two other Asian jurisdictions will be added to the ranks of being active in Australian M&A in 2011,” they said.

Damian and Pathak also predict the increased use of schemes of arrangement in the acquisitions of public companies to continue in 2011. “We also expect to see more hostile scheme proposals via bear hugs being applied,” they said.

Along with resources, a particular area of interest for acquisitions in 2010 was agribusiness – a number of large-scale agribusiness deals involving Australian companies and overseas buyers took place. Damian and Pathak expect this activity to intensify in 2011.

However, with the Australian dollar reaching new highs, the two partners are predicting Australian companies will also be active in the market, utilising the favourable exchange rate to make acquisitions abroad, most likely in conjunction with domestic capital raisings to fund those acquisitions. “Towards the end of this year, we have already seen what we think will be a trend of increasing importance in 2011. We expect foreign deals by Australian companies such as BHP’s A$40bn bid for Canada’s Potash Corporation, Brambles’ €923m proposed acquisition of Germany’s IFCO Systems NV and ANZ’s $4bn bid for Korea Exchange Bank to be a feature of the M&A landscape in 2011,” they added.

Top 10 key M&A predictions:
• Resources M&A to remain strong
• The continuing rise of Asia
• Agribusiness – we have it, others want it
• Australians go abroad with high A$ making foreign acquisitions cheaper
• The return of the big PE bid
• More cash deals, capital raisings to support acquisitions
• A more active FIRB – in line with the worldwide trend
• ACCC: increasing intervention but we expect some return fire
• Schemes of arrangement taking centre stage
• Unlocking of lock ups and breaking of break fees