Failed takeover deals: Here is why they can occur and 4 that occured in Australia in 2023

Nick Sundich Nick Sundich, December 29, 2023

Failed takeover deals can and do happen for various reasons.


Why takeover deals fail

Some deals are killed off quickly by the company giving a negative answer as soon as they let their shareholders know. Others are killed off by shareholders – either by vote or one or two large shareholders publicly expressing opposition to the deal are enough. Others still are blocked by regulators, most notably by the Australian Competition and Consumer Commission (ACCC) or Foreign Investment Review Board (FIRB) in Australia. The ACCC may block a deal out of fears the takeover will lessen competition in the market, while the FIRB may conclude the deal is not in the ‘national interest’. Finally, some fail because either the bidder or target company just run out of patience to get a deal done and one of them walks away.

At the end of each year, there will always be a list of deals that succeeded, and others that failed for one of the above reasons. In this article, we recap 4 of the most notable deals that failed.


4 failed takeover deals in 2023

Suncorp (ASX:SUN) and ANZ (ASX:ANZ)

This bid was not ANZ trying to buy the entire Suncorp Bank, it was just a bid for Suncorp’s retail banking arm. ANZ proposed paying A$4.9bn, in a deal representing a P/E of 13.8x before synergies, 9.3x after synergies and a 1.3x P/B.

ANZ believed the deal would give it a greater market share in Queensland, a state that at the time of the bid recorded better economic growth, better workforce participation and more interstate migration than any other Australian state or territory. As for Suncorp, the bid would allow them to focus solely on its lucrative insurance business.

Unfortunately, the ACCC blocked the bid in August thinking it would lessen competition. This saga is not entirely over, with ANZ launching an appeal back in November. Any reversal of the decision would not happen until CY24, so this failed bid makes our list at the end of CY23.


Australian Clinical Labs (ASX:ACL) and Healius (ASX:HLS)

9 months from when the bid was first made, the deal was formally killed off by the ACCC in December. Healius and ACL were the second and third largest pathology players in the market (and listed stocks) behind Sonic Healthcare (ASX:SHL). ACL wanted to buy Healius to usurp Sonic’s position and thought it Healius’ financial and operational struggles meant it could buy that company at a lower price than it otherwise would have.

The deal was doomed from the start when Perpetual and John Wylie’s Tanarra Capital came out against the deal – the pair held over 20% of HLS shares. In mid-July, the ACCC made an interim ruling, raising 30 pages worth of issues, commencing with competition concerns. ACL refused to give up, telling investors it would work with the ACCC to try and soothe the latter’s concerns. How exactly was not made clear, although some ideas could have included offloading certain centres.

On December 15, the ACCC gave its final ruling, saying no to the deal on the basis that it would lessen competition, given the pair would operate over 50% of approved centres and in some regions would have a monopoly.


Origin Energy

This US$12bn takeover offer from Canada’s Brookfield and the US-based MidOcean was (sort of) killed off by shareholders. We say sort of because a majority voted for the deal – 69% to be exact. Unfortunately, it was short of the 75% threshold required.

Origin’s situation was eerily similar to AGL Energy’s saga last year, in the sense that Origin faced a huge capex bill to transition to a less carbon intense future. Only differences are that Mike Cannon-Brookes stayed out of this one and that this saga has not claimed the scalp of the board – yet.



It looked like this one was a done deal. American miner Albemarle made an A$6.6bn bid for Liontown. Then Gina Rinehart bought a significant stake in the company, giving rise to hope that there might be a bidding war that would end with the company snapped up, by one party or the other. Albemarle’s bid was suddenly withdrawn after the latter’s due diligence and Gina Rinehart is yet to move on the company.

Given first production is expected in CY24 and its Mineral Resource Estimate of 156Mt at 1.4% lithium, we wouldn’t be surprised to see M&A interest in this one in the coming months. We admit that capex is a concern, although the bulk of funding can come from within the company’s own cash reserves.


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