Heading into 2026, Australian deal activity was building towards a big year with strong conditions and a strong economic landscape. However, in late February, the conflict in Iran escalated, shutting down the Strait of Hormuz - an integral sea passage for the global energy and shipping industry. Oil surged past US$100 a barrel, triggering a global market sell-off leading to immense uncertainty across most industries. But has the unexpected Middle East conflict put a pause on deals in Australia?
Six weeks on, the answer from the Australia’s leading bankers is mixed.
Total M&A for the latest quarter reached US$31.4bn up from US$20.3bn in the previous quarter. Goldman Sachs led the league tables, closely followed by Barclays (Barrenjoey) and UBS. In equity capital markets (ECM), Macquarie raised the most capital at US$587m, with total Australian ECM reaching US$3.9bn ($US).
For those watching from the outside, deal activity persisting through volatility may come as a surprise. However, for the bankers, not so much. Here’s what the best bankers in the country had to say:
Zac Fletcher - Goldman Sachs Australia Co-head of M&A (Per AFR)
"We've seen an increase in M&A volumes, both globally and in Australia, year to date, despite the current geopolitical backdrop." But Fletcher was equally objective about the sensitivity that has crept into dealmaking. "The backdrop, including the direction of rates, is something that we're very conscious of as we think about future activity levels."
Nick Brown - UBS Head of M&A Nick Brown (Per AFR)
"There's been a bit of a pause as people are dealing with the uncertainty. The key question is going to be the speed of that rebound." Brown also drew parallels to Trump’s Liberation Day tariffs last year, which triggered a similar pause coupled with a sharp recovery.
Luke Salter - Macquarie Head of Equity Capital Markets Aus & NZ (Per AFR)
"Equity raising volumes and deals probably kicked off earlier in the year than historically has been the case as the market backdrop was favourable." and "Being very nimble and agile around market windows has been critical to successful deals so far this year,"
Sam Prentice - Jarden Senior Managing Director (Per The Australian)
Prentice noted that M&A activity has been “remarkably resilient”, however mentioned that many of the Q1 deals were already in the making before the conflict emerged in the Middle East. Additionally, he said that "worries about the war in the Middle East and the potential knock-on effects may have slowed things down but they have not stopped, with the potential for IPO activity to re-accelerate as we head into the second half of the year."
It’s clear from both the numbers and the commentary that deals that were already in motion are still getting done, however new deal flow is slowing down as boards wait for further clarity on interest rates, oil’s impact and the conflict’s trajectory. Until the conflict shows signs of resolution, a return to full-scale deal activity seems unlikely - but Australia’s top bankers remain optimistic.
