The 2015 Herbert Smith Freehills public M&A report found there were 55 public M&A deals in the 12 months to 30 June 2015, down 29 per cent on the previous financial year when there were 77 deals.
The 55 deals in the 2014-15 financial year was just shy of the then-historic low of 59 deals in 2012-13.
But the seven mega-deals (down from 16 in 2013-14) helped to bolster the overall deal value and market confidence, said Herbert Smith Freehills.
The most notable deal in the 2014-15 financial year was Japan Post's $6.5 billion acquisition of Toll Group.
The total deal value in 2014-15 was $28 billion, which was down from $43 billion in the previous financial year but well up from the $12.1 billion achieved in 2012-13.
Herbert Smith Freehills partner and co-author of the report, Paul Branston, said his firm was expecting "big things" from the M&A market in 2014-15, particularly in light of the resurgence seen in the previous financial year.
"The high level of competition in 2014-15 also suggested that Australia was poised for a very active year, but the anticipated overall levels of public M&A activity did not eventuate," Mr Branston said.
"Despite the wide-ranging volatility that was a feature of 2014-15 and clearly impacted deal making, there were a number of large and strategically important mega-deals, showing the foundations of the Australian M&A market remain robust," he said.
The large number of mega-deals in the second half of 2014-15 indicated a shift in momentum, Mr Branston said.
"Performance in the first quarter of 2015-16 has been strong, with a number of very large deals announced, a marked increase in competitive bids and growth by acquisition clearly on the agenda," he said.
"So whilst the rapid rate of global M&A in 2014-15 did not translate to similar activity levels in Australia, current conditions appear favourable for an increase in activity, and the Australian experience should be different this year.
"We are seeing a strong increase in activity and we expect that to continue," Mr Branston said.
