New Zealand’s agribusiness sector is poised for a significant wave of mergers and acquisitions in the second half of 2025, with industry heavyweights Fonterra, a2 Milk, and Alliance Group leading the charge. A recent report by PwC signals growing momentum in deal activity, fueled by an upswing in private equity (PE) involvement and strategic moves aimed at reshaping the regional dairy landscape.

While deal volumes in the second quarter remained largely flat year-over-year, the report highlights a 19 per cent increase from the previous quarter, indicating a market building towards heightened activity. PwC partner Regan Hoult attributes this surge to a growing backlog of PE portfolio companies and mounting pressure to return capital to investors, which has ignited a more vigorous and strategic deal environment behind the scenes.

Critical transactions expected to drive the market include Fonterra’s ongoing spin-off of its consumer business—a move designed to sharpen focus on core operations—and a2 Milk’s highly anticipated acquisition of additional manufacturing capacity. These deals have attracted close attention from analysts due to their potential to redefine competitive dynamics and enhance operational scale in the region.

International investor interest remains robust, with overseas buyers accounting for 49 per cent of deals in the quarter. Nonetheless, the bulk of transactions continue to be executed by New Zealand domestic buyers, alongside strong participation from Australia and the United States. This blend of local and foreign investment underscores the global recognition of New Zealand’s intellectual property, innovative consumer products, and sustainable agribusiness practices as valuable assets.

Despite ongoing geopolitical headwinds, including tariff challenges from the U.S., the sector demonstrated resilience with 79 deals completed in the first half of 2025, compared to 74 over the same period in 2024. This steady performance, combined with clear signals of accelerated M&A activity ahead, positions New Zealand’s agribusiness sector for a dynamic and transformative finish to the year.

As global dairy markets continue to evolve, these strategic moves could recalibrate regional supply chains, product innovation, and competitive positioning—making 2025 a pivotal year for New Zealand’s agribusiness leaders.