Subdued year for M&A in Australia’s agribusiness, food, beverage sectors: Grant Thornton

The multi-billion takeover offer for Costa Group — a major grower of tomatoes, citrus and avocados — has emerged as the top deal in what was a muted year for mergers and acquisitions in the Australian agribusiness, food and beverage sectors.

Australia completed 49 deals in the 18 months to the end of June, a sharp decline from the 67 recorded in the previous period, according to a new Grant Thornton report on to be released Thursday.

It means Australia drops from its well-established position among the top five countries for deal volumes to sixth place.

Grant Thornton said domestic deals have shown a shift toward the mid-market, with 92 per cent valued below $50 million in 2024, compared with the 69 per cent recorded over historical periods .

The accounting and consulting firm reckons the decline in high-value transactions suggests buyers are shifting towards smaller deals to support their strategic growth, reflecting a more cautious approach to deal-making.

The increasing interest in the mid-market presents opportunities for small to medium-sized businesses to be acquired by larger firms, Grant Thornton said.

Taking the mantle as the biggest transaction of the year was US private equity group Paine Schwartz Partners’ purchase of Costa for $2.3 billion. Costa operates two mushroom facilities, a distribution centre and a berry farm in WA.

The acquisition concluded in Costa delisting from the Australian Securities Exchange in February this year.

This was followed by GrainCorp’s acquisition of agricultural products and services provider XF Australia for $35m.

Globally, 1222 M&A transactions were recorded in the 18 months to the end of June, 23 per cent below the long-term average of 1584.

As for its outlook, Grant Thornton is optimistic M&A activity will gradually climb back to pre-COVID levels as interest rates come down and investors feel less of a need to take a highly cautious approach to deals.