Australia's dealmaking market is heating up.
The latest signal came from Melbourne-based brokerage and advice business Inovayt, which quietly acquired South Australian Fresh Home Loans in December, as first reported by Australian Broker.
While the deal was small, the acquisition reflects a growing shift among Australian market players and the forces fueling increased M&A.
"The conversations we've had around M&A, probably in the last 24 months, have been very high, compared to prior to that when there was almost nothing," Nick Reilly, founder and chief executive officer of Inovayt, told Australian Broker. "What's happening is bigger groups are seeing an opportunity to bring in smaller groups. And things like AI and tech and the money that's needed to build these platforms, or back ends, what's happening is that businesses that have capital and can spend money on advancing their tech are going to progress a lot quicker. So it's getting harder and harder for the smaller businesses to keep up. And I think bigger groups can see that, which is why we're starting to see M&A being more prevalent than it was two or three years ago."
Chris Slater, head of strategic growth at Australian private equity firm Recludo Group, added: "I would say a lot of it would be driven by the lack of banks' ability to actually compete and grow profitably and get a return.
"If you listen to the commentary that's coming out of the big banks, and even if you talk to the second-tier banks, they'll tell you the same thing: it’s very cost intensive to run a bank," he continued. "The regulatory costs are a lot. And the costs of the margins that they're making are being squeezed. So there's definitely something to be said — with the net interest margin that they're making — for merging and getting some costing-reducing in scale."
There's also companies seeking growth options, increased private equity activity and accessible financing are powering the market’s momentum.
In 2025, global M&A deal volumes reached roughly $7.46 trillion AUD, (or $4.81 trillion USD), up from $5.27 trillion AUD, (or $3.4 trillion USD), the year before, according to MergerMarket data. That's an increase of nearly 42%. And the Australian markets, while smaller, still kept pace.
In 2025, publicly-announced deals to buy or merge with companies that are based in Australia reached $143.8 billion AUD (or $92.8 billion USD), according to Dealogic.
Examples can be seen throughout the market with major lender consolidations and acquisitions. In November, Bank Australia wrapped up its second acquisition of 2025, this time with Australian Unity Bank. The lender also completed a merger with Qudos Bank in July. Earlier in April, Regional Australia Bank and Summerland Bank formally agreed to merge their operations by 2026. In September, customer-owned banks Great Southern Bank and P&N Group (Police and Nurses Limited), signed a memorandum of understanding (MOU) to discuss a potential merger. There's also Auswide Bank and MyState Bank Limited, G&C Mutual Bank and Unity Bank, Teachers Mutual Bank Limited and Australian Mutual Bank Limited, and People's Choice and Heritage Bank.
But dealmaking hasn't been limited to the banks. Brokerages are consolidating too, either out of necessity or to grow faster.
In September, Recludo Group revealed that it had snapped up three firms since the start of the year. The same month, Aussie alternative asset manager Salter Brothers agreed to buy private credit fund manager Causeway Asset Management Limited.
Flint Group merged with Brisbane-based brokerage FPW Group in December, rebranding as Flint Queensland, and marking Sydney-based Flint's second merger of 2025. In May, Flint merged with Brokerage & Co. in Adelaide. Flint now has its sights set on Noosa.
Reilly said he's eyeing New South Wales for Inovayt's next move, adding that there's "definitely" going to be more consolidation in the wider market.
"Because the gap will continue to widen and eventually the smaller brokerages will really find it difficult to compete," he explained. "I personally think we're just at the start of the journey. And once we start seeing some success in these mergers, which we probably haven't really seen yet. We've seen some transactions done, but we haven't seen or had proof of the success. But once we see that, it will continue to roll on."
