Great Britain the most important investor into Australian brands post GFC – report

Since 2010, 72% of Australian brands acquired by foreign parties have gone to Great Britain, compared to only 6.5% between 2000 and 2009.

This huge shift is one of many others which saw patterns of inbound and outbound foreign acquisitions change drastically after the global financial crisis.

The ‘Brand transactions in Australia’ country report by Markables focusses on brand transactions from 2000 until 2015, including domestic, inbound (foreign companies acquiring Australian brands) and outbound (Australian companies acquiring brands abroad). It tracks the brands’ value and global direction.

Other findings include:

  • post financial crisis, the amounts spent by Australian corporations to acquire brands decreased by almost 90%,
  • pre crisis, Australian brands invested more in brands abroad than foreign brands did  in this market, whereas post-crisis, foreign investors increased their investments into Australian brands by nearly six times, leaving Australia with a sizeable ‘trade deficit’,
  • major pre-crisis investors into Australian brands USA, Mexico and France, virtually disappeared with the emergence of Great Britain as the number one foreign investor post-crisis,
  • pre crisis, New Zealand brands made up most of the value Australia spent on outbound acquisitions, at 65%,
  • post crisis, most of this value (32%) has been spent on American brands, much of the rest then spread quite evenly between Malaysia, Brazil, NZ, Great Britain, and Hong Kong.

Amounts of domestic and outbound brand transactions remained largely unchanged before and after the crisis, but inbound transactions have exploded since 2010, with only 26 reported before, and 73 since.

What has changed with the outbound brand transactions is the value of Australian brands acquired – pre crisis the average transaction value of an Australian brand was US$173 million, compared to US$21 million post-crisis.

The most valuable Australian brands acquired by foreign owners since 2010 have been Fosters, David Jones, inova Pharmaceuticals, Repco and Sportingbet.

According to newly released information on the rankings of most valuable brands that changed hands in 2014, the most valuable brand transaction was German corporation Bayer’s US$7.12bn acquisition of US over-the-counter pharmaceuticals brand Merck.

The five most valuable Australian brands acquired since 2010 are:

1. Fosters, US$4.77bn, by SABMiller, USA, 2011,
2. David Jones, $536 million, by Woolworths, South Africa, 2014,
3. Inova Pharmaceuticals, $422 million, by Valeant, Canada, 2011,
4. Exego Repco, $141 million, by Genuine Parts, USA, 2013,
5. Sportingbet, $135 million, by William Hill, GB, 2013.

The five most valuable global brands acquired by Australian corporations since 2010 are:

1. Microflex, USA, US$141 million, by Ansell, 2014,
2. Zhaopin, China, $114 million, by Seek, 2013,
3. Jobstreet, Malaysia, $74 million, by Seek, 2014,
4. Catho, Brazil, $68 million, by Seek 2012,5. Doryx, USA, $58 million, by Mayne Pharma, 2015.

The five most valuable brands acquired domestically since 2010 are:

1.  Rebel Sport, US$237 million, by Super Retail Group, 2011,
2. Pacific Magazines, $168 million, by Seven West Media, 2011,
3. SAE, $132 million, by Navitas, 2011,
4. Wesfarmers Insurance, $69 million, by Insurance Australia Group, 2014, and
5. Norfolk (O’Donnell Griffin, Haden Resolve FM), $46 million, by RCR Tomlinson, 2013.


Ben Ice
BY Ben Ice ON 24 November 2015