Australia’s M&A landscape is shifting.
After the $434M takeover of Mayne Pharma collapsed, regulators are signalling tougher expectations for foreign bidders — especially around reverse break fees and regulatory certainty.
Treasurer Jim Chalmers blocked the Cosette Pharmaceuticals bid on national-interest grounds, following FIRB’s assessment that the deal posed risks to the supply of critical medicines. Cosette had also tried to withdraw earlier, citing performance issues and even threatening to shut down Mayne’s Adelaide plant.
🔍 What’s Changing in Australian M&A?
Legal experts say target boards will now demand:
- Higher reverse break fees (potentially 3–4% like U.S. standards, not the traditional 1% break fee paid by targets)
- Earlier and more concrete regulatory approvals
- Stricter commitments in binding agreements, preventing bidders from shifting intentions after FIRB filings
This marks a major change: Australia remains open to foreign capital, but regulators will not tolerate bidders using approvals as bargaining leverage.
🔎 Market Context
Inbound interest remains high:
$81B in Australian M&A deals announced in 2025, with $35B from foreign buyers — the strongest in four years. But the Mayne case is now a cautionary tale.
🧭 Takeaway for Foreign Buyers
Transparency and regulatory discipline are no longer optional — they are prerequisites for getting deals done in Australia.