Why 2025 became the year of collapsed mega-deals in Australia: Inside the Santos, BHP, and Anglo American blowups

Australia’s mergers and acquisitions landscape in 2025 was supposed to be defined by consolidation, energy transition plays, and strategic positioning in critical minerals. Instead, it turned into a showcase of unrealized ambition and collapsed megadeals. Despite a broadly improving macroeconomic environment and rising valuations across several sectors, many of the largest proposed transactions in the country fell apart just before the finish line. The high-profile withdrawals of Abu Dhabi National Oil Company’s proposed acquisition of Santos Limited and BHP Group’s pursuit of Anglo American underscored a shift in M&A risk perception, particularly in resource-driven sectors. While total deal value in Australia remained historically high, the failure to execute on high-stakes takeovers revealed a growing chasm between buyer ambition and stakeholder alignment.

Why did Abu Dhabi National Oil Company walk away from its USD 12 billion Santos bid?

The most consequential failed deal of 2025 occurred when Abu Dhabi National Oil Company (ADNOC), via its global investment arm XRG, officially withdrew its USD 12 billion proposal to acquire Santos Limited. The takeover, valued at approximately AUD 18.7 billion, was initially seen as a vote of confidence in Australia’s liquefied natural gas infrastructure and long-term demand from Asia. However, despite months of due diligence and advanced-stage negotiations, both sides were unable to align on key commercial and regulatory conditions.

Santos stated that the consortium, while interested in the strategic potential of its portfolio, was unwilling to accept full responsibility for securing domestic and international regulatory approvals. Further complications arose around the Australian government’s increasing emphasis on domestic gas reservation policies. Abu Dhabi National Oil Company, according to reports, expressed concerns about assuming unquantified long-term regulatory risk without corresponding concessions. This impasse led to the termination of discussions in September 2025. The withdrawal marked the third failed foreign acquisition attempt for Santos in seven years, reinforcing its reputation as a high-profile but difficult target within the Australian energy market.

Why did BHP Group’s takeover attempt of Anglo American collapse despite strong market logic?

In another dramatic retreat, BHP Group abandoned its bid to acquire Anglo American in what would have been a landmark consolidation in the global copper industry. The transaction, estimated at USD 42 billion during the most recent approach in mid-2025, was seen as a strategic move by BHP Group to expand its copper footprint amid rising demand driven by electric vehicle production and grid infrastructure. However, the deal was conditional upon Anglo American spinning off its South African platinum and iron ore operations, a step that proved politically and operationally untenable.

Anglo American’s board repeatedly rebuffed BHP Group’s offers, arguing that the structure was flawed and disproportionately burdened shareholders with execution risk. South African stakeholders, including government-linked entities, expressed concern over the potential disruption to local jobs and tax revenues. Despite BHP Group’s multiple engagement efforts, including revised bids and public statements justifying the strategic logic, mounting resistance from both institutional investors and sovereign voices made it clear that regulatory and political risks outweighed the potential benefits. In July 2025, BHP Group officially walked away, issuing a statement emphasizing discipline in capital allocation and strategic focus, effectively ending its multi-year pursuit of Anglo American.

How did regulatory pressure and domestic policy hinder dealmaking in Australia in 2025?

Across sectors, 2025 marked a turning point in how regulatory uncertainty and sovereign sensitivities impacted high-value M&A activity in Australia. The Foreign Investment Review Board continued to scrutinize inbound transactions involving energy and critical minerals. Market observers noted that cross-border deals involving entities from the Middle East, the United States, and China faced growing delays, additional disclosure requirements, and non-transparent roadblocks that made final approvals increasingly difficult to secure.

Australia’s evolving regulatory frameworks around decarbonization and domestic supply obligations further complicated matters. In the case of Santos Limited, rising expectations that acquirers would guarantee sufficient gas supply to local markets at capped prices introduced new downside risk for foreign bidders. Meanwhile, in the mining sector, the political optics of asset spin-offs tied to employment-heavy regions like South Africa, as seen in the Anglo American scenario, became insurmountable obstacles for even the most cash-rich suitors.

Did the Santos–Woodside merger talks foreshadow this wave of deal collapses?

Although not a formal 2025 deal failure, the earlier collapse of merger talks between Santos Limited and Woodside Energy provided a useful preview of the themes that would dominate the Australian M&A narrative. That proposed all-Australian LNG merger, which was active through 2023 and ultimately ended in early 2024, was positioned to create one of the largest independent oil and gas players in the world. The rationale appeared sound, offering economies of scale in capital-intensive projects and stronger pricing leverage in Asia.

However, internal sources suggested that the companies could not agree on valuation multiples and future capital commitments. Institutional investors were reportedly divided on whether the merger would unlock value or simply mask underperformance. The merger was shelved without fanfare, but the residue of its failure colored the market’s expectations for subsequent large-scale energy consolidation.

Why do earlier deal failures still influence sentiment despite not being from 2025?

Several major deals often cited in the media as part of 2025’s deal turbulence were, in fact, terminated in earlier years. The Brookfield Asset Management and MidOcean Energy consortium’s AUD 10.6 billion bid for Origin Energy failed in 2023 when it fell short of the 75 percent shareholder approval threshold despite offering AUD 9.53 per share. Similarly, Albemarle Corporation abandoned its AUD 6.6 billion bid for Liontown Resources in late 2023, citing increasing deal complexity and valuation volatility driven by lithium price shifts and regulatory nationalism. Private equity firm KKR also withdrew a proposed acquisition of Ramsay Health Care, valued at over USD 13 billion, during 2022 and 2023 amid tightening debt markets and deteriorating operational forecasts in the private hospital sector.

While none of these deals were active in 2025, they were frequently referenced by analysts and institutional investors who viewed them as cautionary tales. The collective memory of these deal failures contributed to a more conservative posture from both buyers and boards, reinforcing the trend of walking away from even slightly ambiguous transactions.

What lessons can dealmakers draw from 2025’s M&A collapses in Australia?

The events of 2025 reinforce the notion that mega-deals require more than just financial engineering and strategic logic. The failure of the Abu Dhabi National Oil Company–Santos Limited proposal and BHP Group’s unsuccessful pursuit of Anglo American underscore that political risk, regulatory opacity, and social license to operate are now central to deal structuring. Buyers must be prepared to engage with not just corporate boards, but also governments, regulators, and civil society, particularly in sectors involving energy transition, resource extraction, and infrastructure.

From an investor standpoint, 2025 was a year that demanded higher valuation discipline and sharper due diligence. Shareholders increasingly resisted bids that failed to compensate for long-term uncertainty or lacked clear operational upside. For Australia, a country rich in assets but increasingly burdened by execution risk, the message is clear: unless dealmakers recalibrate their approach to stakeholder alignment, the probability of mega-deal failure will remain stubbornly high regardless of sector or macro conditions.

Can 2026 deliver a more stable deal environment?

Heading into 2026, M&A optimism is cautiously recovering. Multiple suitors have expressed interest in infrastructure assets and critical minerals projects, and private equity firms are sitting on significant dry powder. However, few are willing to commit to large transactions without airtight stakeholder consensus, predictable regulatory pathways, and clearly articulated long-term growth models.

The story of 2025 will be remembered not just for the dollar value of collapsed deals but for what those failures revealed about the evolving risk landscape. Dealmakers looking to succeed in 2026 will need to price in more than just the cost of capital. They will need to price in the politics of energy, the sensitivities of sovereign stakeholders, and the increasing demands of ESG-driven investors. Anything less may once again leave even the most promising deals stranded just short of the finish line.