For the Second Quarter of 2025

Note:

The data has been filtered to exclude: (i) real estate transactions; (ii) early stage venture capital transactions where size is stated or estimated to be less than $1.5m; (iii) transactions announced but yet to complete; (iv) other transactions where applicable.   

^{Sources: Mergermarket, CapitalIQ, Eikon, Pitchbook, PwC analysis (2 July 2025)}

The outlook for M&A in New Zealand over the next six to 12 months is one of cautious persistence. Despite a backdrop of global uncertainty - ranging from geopolitical instability and inflationary pressures to shifting trade dynamics - deals are still getting done.   

Many of these themes are covered in our Global M&A industry trends: 2025 mid-year outlook report and mirrored in our local New Zealand market. For local dealmakers, we find that the focus is shifting from waiting for ideal conditions to adapting strategy for a more complex environment.

Focus on quality  

While overall deal volumes remain well below historic highs, quality assets are still attracting strong interest. In some cases, competitive auctions are driving up valuations, with buyers willing to move decisively for well-managed companies with strong growth prospects. This ‘flight to quality’ is expected to continue, particularly in sectors demonstrating resilience or alignment with long-term trends.  

On the flip side, lower-quality assets are struggling. Sale processes for these companies are being extended - or shelved entirely - as investors take a more measured, risk-sensitive approach.  

Changing sector dynamics  

Sector dynamics are beginning to diverge sharply. Healthcare, particularly primary care, stands out as an active space, with multiple assets reportedly coming to market and a strong pipeline forming. In contrast, the building and construction sector is under strain due to tough trading conditions, cost pressures and market uncertainty.  

AI and digital capability are also emerging as major themes. With global investment pouring into AI, local firms positioned to leverage these technologies - either as acquirers or acquisition targets - may see heightened interest. AI is not only driving new types of capability-driven deals but also reshaping traditional valuation models.

Positive signals for private equity

Private equity (PE) activity has been slower than expected, with both new investments and exits down. For some PE firms, a growing backlog of portfolio companies is creating pressure to return capital to investors. While some positive signs are visible globally, local PE players may need to deploy creative strategies, such as continuation funds or secondary sales, to unlock value in a difficult exit environment.  

The importance of scenario planning

In this climate of uncertainty, scenario planning is taking on new urgency. Dealmakers should be thinking through all the possibilities they’re presented with to ensure they are prepared for whatever comes their way.   

Unexpected events are becoming increasingly common. In a climate where unpredictability is standard - driven by shifting trade policies, global tensions, and economic fluctuations - businesses are operating in a state of constant change. In this context, disciplined execution isn’t just important - it’s essential. 

It’s a message that’s vital for New Zealand’s M&A market: resilience and adaptability are more important than prediction. As conditions evolve, the most successful players will be those who stay focused on long-term strategic priorities, make deliberate capital allocation decisions, and build agility into every stage of the deal lifecycle. We have seen the impact of this with an increase in bespoke sale processes and more bi-lateral deals.  

The next six to 12 months will continue to challenge traditional approaches but also offer opportunity for those who are prepared to move decisively and strategically. 

The world is shifting – and so is value

Businesses are being defined less by traditional sectors, and more by the human needs they meet and the ecosystems they participate in.

PwC’s Value in Motion research, explores how value is moving faster than ever before – across geographies, across established sectors, and across traditional value chains.  New domains of growth are emerging that cut across these boundaries, bringing new peers and competitors to existing markets.

We are seeing this dynamic play out in M&A markets right now. It is reshaping which businesses own what, and more importantly, who will see the inherent and potentially hidden value in assets due to the opportunity for longer term growth opportunities.

This has big implications for sellers, acquirers, and businesses themselves.

The rise of domains is changing business

In every sector, we are seeing an evolution towards a domain view where traditional industries are reconfigured to meet fundamental human needs.

For instance, healthcare is no longer purely hospitals, clinicians, and pharmaceutical companies. The “how we care” domain includes all those traditional elements plus technology companies that create wellness apps, genomics data, personalised diagnostics, AI tools, and wearables. It can even include aged care platforms, and financial services.

Examples of businesses operating across a domain include tech giants like Apple and Google buying into payment systems, embedding financial services into devices.

Infrastructure investors such as Infratil have stepped into specialist healthcare, recognising the long-term demand profile and defensive cash flows. Recently we’ve also seen Xero move into the payments space through its acquisition of Melio.

These acquisitions reflect how domains are pulling in new players and how capabilities, not just sector labels, now determine strategic fit. As these examples show, these blurred boundaries are creating new, unexpected buyer pools for businesses. New ownership patterns are emerging as new acquirers target assets that extend their relevance across domains. It is also creating new views on value for assets that enable buyers to achieve success in their chosen future domains.

Sellers should look through a future buyer lens

There are lessons here for those preparing for an exit, but also those looking at their portfolios and testing value creating carve outs.

For asset owners, the buyer universe is shifting. While traditional sector-based acquirers remain, domain-driven buyers are increasingly looking for capabilities that align with their future strategy — and they’re willing to pay a premium for that fit. This opens new value opportunities across portfolios.

We see five strategies for asset owners to take advantage of domain thinking in M&A:

Shape the deal by shaping the narrative

The switch of thinking to domains is increasingly driving M&A outcomes in New Zealand and indeed globally. This provides a huge opportunity for buyers and sellers to maximise value but also maximise relevance in future ecosystems. Businesses that can see themselves through a future buyer’s lens will be better positioned to shape their deal, attract an innovative buyer pool, and ultimately create superior M&A outcomes.

The next buyer won’t sit in your industry of today – but at the intersection of tomorrow’s domains. Looking outward is no longer optional; it’s where strategic value will be found.