Due Diligence Market Update: January 2026

The second half of 2025 has seen strong activity in the Australian Mergers & Acquisition space.  This has been led by some notable deals including: 

• The acquisition of Insignia Financial by CC Capital’s, worth an estimated $3.2B 

• The acquisition of AZEK by James Hardie worth $8.75B 

• The major public merger of Soul Pattinson and Brickworks worth $14B  

We have also experienced a considerable uplift in mid-market deals with a surge of deals expected to complete prior to the upcoming Australian Competition and Consumer Commission’s (ACCC) new merger regime starting on 1 January 2026.  

In Deloitte’s M&A survey across the top 100 M&A leaders in Australia, The Deal in Focus: Heads of M&A, 75 per cent of survey respondents advised that they believe that the current economic conditions support M&A growth. However, respondents are also cautiously optimistic, with only 47 per cent confirming that international uncertainty will affect their ability to execute deals in 2026.   

The due diligence sector

In 2025, the Australian due diligence market is marked by increased risk aversion, extended timelines, and a stronger emphasis on operational resilience and compliance, especially in regulated sectors. We have observed the following:  

Regulatory compliance and reliance:

1. Prudential Standard CPS 230 Operational Risk Management aims to enhance operational risk management practices and improve resilience among entities regulated by the Australian Prudential Regulatory Authority (APRA). This has led to due diligence advisors conducting an in-depth examination on the Target business’s ability to maintain critical operations during severe disruptions. 
   
2. Changes to the ACCC merger control laws, including the potential for mandatory notifications which is creating a more stringent regulatory environment and demanding more detailed pre-deal planning. 

Privacy and cyber risks 

1. At Bellrock we are continuously updating our policyholders on their regulatory obligations, including mandatory reporting obligations and the ever-increasing threat landscape. This in turn has seen an uplift is specific cyber due diligence focusing of maturity assessment, incident response plans, assessing compliance with the Privacy Act (especially for handling personal data), and verifying internal controls against high-profile breaches.  

Deal Structures  

1. The prevalence of complex deal structures is increasing. This trend includes carve-outs or divestments, inbound foreign investment, and a greater emphasis on negotiating earnout-specific clauses. These factors contribute to extended transaction timelines, as buyers require more comprehensive due diligence to ensure greater certainty regarding performance.
2. As deal structures become more complex, Warranty and Indemnity Insurance (W&I) remains essential for de- risking transactions, especially in competitive auction processes.  

Insurance due diligence

Insurance due diligence remains an undervalued resource, yet we are observing an increase in transactions in the latter half of 2025. In light of heightened regulatory requirements and greater commercial and financial scrutiny, insurance due diligence serves as a critical risk mitigation tool that safeguards the buyer’s investment. 

As 2026 approaches, we anticipate that insurance due diligence will become an essential component of every transaction. A comprehensive analysis of the Target business’s risk profile and risk management culture enables buyers to better assess the viability and security of the acquisition. This process also informs deal valuation and reveals hidden liabilities, which may be addressed through acquisition structuring or insurance transfer solutions within the Go Forward insurance programme. 

The outlook for 2026 due diligence market is defined by a deep need for assurance, making it more complex, comprehensive, and compliance-driven than in previous years. 

Continue reading our full range of market updates:

• Insurance Market Overview: January 2026
• Claims
• Workers Compensation
• Corporate and Multinational Risk
  • Accident & Health
  • Commercial General Liability
  • Contractors Plant & Equipment
  • Due Diligence
  • Motor
• Construction, Property and Development
  • Construction Material Damage
  • Construction Liability
  • Property
  • Strata
• Financial Lines
  • Construction Professionals
  • Cyber Liability
  • Directors and Officers Liability
  • Management Liability Insurance
  • Professional Indemnity
  • Transaction (M&A) and Contingent Risks