Control Premium Study


Control Premium Study 2021

An analysis of the implied control premiums observed in successful takeovers and schemes of arrangement

Download Control Premium Study 2021 »







Control Premium Study 2021


An analysis of the implied control premiums observed
in successful takeovers
and schemes of
arrangement

Download the report »

Control Premium Study 2021

Control Premium Study 2021

RSM’s 2021 Control Premium Study - a study of 605 successful transactions and schemes of arrangement in Australia and 131 in New Zealand, completed between 1 July 2005 and 31 December 2020.

In 2010 we released our inaugural study in which we analysed the implied control premiums observed in successful takeovers and schemes of arrangement completed in Australia, with expanded dataset studies issued in 2013 and 2017.

This study covers the 15.5 year period to 31 December 2020 and provides a comprehensive insight into change of control transactions involving ASX listed, and for the first time, NZSX listed companies. More specifically, the implied premiums that acquirers are willing to pay over and above the target’s share price.

This study analyses the relationship between control premiums and several critical market factors. These factors include industry sector, consideration type, transaction type, timing, toehold and market capitalisation, among others. Our results indicate that control premiums are influenced by each of these factors to varying degrees and at different times in the economic cycle. This study also contains analysis on the impact of COVID-19 on the M&A market.

We hope you find the results of the Control Premium Study of interest and value, providing some insight as to what to expect from potential M&A transactions over FY22 and beyond.
Control Premium Study 2021 Control Premium Study 2021
Median Control Premium by Industry Sector

Industry sector significantly influences the control premium required to complete a successful transaction. 

Our analysis shows sectors that are traditionally priced and valued on upside potential revealed significantly higher control premiums (such as metals and mining, energy, healthcare, and telecommunications, IT and software) than those where valuations are more typically limited to asset base (e.g. real estate and financial institutions).

Median & Average Control Premium by FY & CY

The Australian market has experienced a number of economic cycles over the 15.5 years analysed, including the mining boom, global financial crisis and more recently the COVID-19 pandemic.

The graph shows the impact of these on observed control premiums, with variability in the S&P/ASX 200 Index and periods of global uncertainty impacting buyer behaviour in the Australian market.  

Control premiums have risen during COVID-19 to record levels of around 50% driven by strategically opportunistic deals in healthcare, metals and mining, and diversified financials.

Contact us

If you have any questions or would like to chat to an adviser, contact one of our experts below



Glyn Yates

National Head, Corporate Finance - Melbourne

Contact Glyn ➜


Nadine Marke

Director, Corporate
Finance -
Perth

Contact Nadine ➜


Tim Goodman

Director, Corporate
Finance -
Sydney

Contact Tim ➜



Andrew Clifford

Director, Corporate
Finance -
Melbourne

Contact Andrew ➜


ACKNOWLEDGEMENTS

We acknowledge the input and support we have received from Curtin University’s Dr Lien Duong, Dr Baban Eulaiwi and Professor Grantley Taylor, and Victoria University of Wellington’s Associate Professor Thu Phuong Truong in the completion of this study.