With local CEOs and foreign investors now circling a growing cadre of unloved ASX stocks – trading at widening discounts to fair value – now might be the time to play contrarian investor and buy in the hope of future spoils.
The mountain of unspent capital that private equity firms are currently sitting on globally, along with Australia’s relatively weak dollar and mouth-watering valuation gaps – some exceeding 40% - has set the stage for heightened M&A activity in 2026.
According to global law firm Ashurst, underlying conditions – from abundant private capital to available debt funding and sustained foreign interest – are firmly in place for a strong 12 months of M&A activity ahead.
Cashed-up private equity
Private equity buyouts rose 32% in value to US$30.5 billion across 95 deals, renewing momentum after subdued activity following the 2022 peak.
Following a solid year for M&A activity in 2025 – anchored by the pending $11.7 billion deal for Qube (ASX: QBE) from Macquarie Asset Management – when 40 binding public M&A deals valued above $50 million were announced, Neil Pathak, partner and co-head of M&A at Ashurst, expects a rapid acceleration in M&A activity early 2026.
Other noteworthy deals included the $12.7 billion merger between Soul Patts (ASX: SOL) and Brickworks – which delisted on 24 September, 2025, plus CC Capital’s proposed $3.2 billion acquisition of Insignia Financial (ASX: IFL).
Then there was Brookfield and GIC's acquisition of National Storage REIT (ASX: NSR), which is also expected to delist during the second quarter of 2026.
Resources sector dominates
Unsurprisingly, the materials sector, including resources, saw the greatest M&A activity in 2025, accounting for 33% of total deals, with notable transactions including the successful $3.7 billion acquisition of Gold Road Resources by South Africa-based and NYSE-listed Gold Fields and Ramelius Resources’ (ASX: RMS) acquisition of Spartan Resources for $2.4 billion.
Given that Australia is an attractive destination for foreign investment - at a time when interest in the U.S. market is flailing – Pathak is witnessing clear evidence that strategic buyers, private equity sponsors and sovereign-backed funds are all actively assessing [M&A] opportunities locally.
Given that the public-to-private transactions are a key trend for 2026, Pathak expects this year to see a continuation of ASX stocks - leaving the main board – falling into the hands of private ownership.
Despite regulatory hurdles, foreign interest in Australian public M&A continues to grow, with around to 66% of the 40 announced deals involving a foreign bidder, up from the system average of 50%.
Aussie CEOs target acquisitions
While resources and materials are expected remain hotspots for public M&A activity in 2026, Ashurst also expects would-be acquirers to circle attractively priced technology, energy transition and real estate stocks this year.
However, overseas acquirers won’t have the M&A field to themselves in 2026.
According to a PwC Australia M&A outlook, over half (52%) of Australia’s CEOs are planning major acquisitions and if not this year, certainly over the next three years.
Kushal Chadha, deals leader at PwC Australia, believes Australian dealmakers are well-positioned for deals that genuinely transform their businesses, even if it means going beyond their core operations.
"CEOs aren't just chasing scale, they're targeting capabilities and technology that will define how their companies compete in the future,” he said.
"The green shoots for 2026 are here: mid-market deals are getting done, international capital is flowing in, and private equity is showing promise.”
Proposed Takeovers/Mergers
M&A deals typically take time to either complete or fall over. Here are some of the recently proposed high-profile M&A deals yet to get over the line.
- U.S.-based Steel Dynamics has initiated a massive proposed $13.2 billion-plus takeover bid for BlueScope Steel (ASX: BSL).
- Macquarie Asset Management has proposed an $11.6 billion bid for the logistics company Qube Holdings (ASX: QUB).
- NYSE-listed Energy Fuels has proposed a $444 million acquisition of Australian Strategic Materials (ASX: ASM).
- Bain Capital has been in exclusive talks to acquire Perpetual Wealth Management (ASX: PPT)
- TA Associates has been identified as a logical buyer for Iress (ASX: IRE).
- Washington-based defence specialist Arlington Capital Partners has shown interest in shipbuilder Austal (ASX: ASB).
Rumoured/potential Targets
According to analyst reports and market speculation, the following companies are also under active consideration by various suitors as of late 2025/early 2026:
- Emeco Holdings (ASX: EHL): Confirmed receiving unsolicited interest from multiple potential acquirers.
- Red Hill Minerals (ASX: RHI): Has been cited as a target for Deterra Royalties (ASX: DRR).
- Antipa Minerals (ASX: AZY): Is considered a target for Greatland Resources (GGP).
- PointsBet Holdings (ASX: PBH): Received a bid from Japan's Mixi, with a potential bidding war.
- Monash IVF (ASX: MVF): Is subject to a proposal from Genesis Capital and Soul Patts.
Value plays
Given that they’re currently trading at the highest estimated discounts to fair value, the following stocks could also be on the receiving end of opportunistic bids this year.
