As we are M&A advisors, last week a German investment fund visited us in Australia with the intention of giving us a mandate to search for Australian industrial companies on sale. They think there are great opportunities in Australia.
Their belief is that there will be an “inverse delocalization”, which means that, given the crisis that has taken place in the last five years and the unemployment rate in Australia, the costs are being adjusted and, as such, the industry in Australia will become more efficient and competitive (taking into account the transport cost from overseas countries to Europe).
This is good news for Australia, a country that has been losing many industries during the last 10 years. The average size of the Australian industrial SME is $6 million, whereas in France and Germany it is close to 40 million euros. As the concept “economy of scale” shows us, size inevitably determines the competitiveness of a company and, as such, Australia is clearly at a disadvantage. For that reason, the following years will see a concentration process on Australian industries.
Enrique Robert Brown
International Business Intermediary at Calder Associates.