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March 29, 2011

M&A Activity in Canada

Do Canadians fall apart in the mergers and acquisitions space?  Have they missed getting out into foreign business acquisitions too? Not according to information on performance last year:
Canadian Mergers and Acquisition activity increased for the third successive quarter in Q4 with 302 transactions worth approximately $52 billion.  This represents an increase of 12% in the value of deals announced while the number of announcements increased by 9% over the previous quarter.  The Canadian banks and pension funds announced numerous transactions that contributed significantly towards increased cross-border Mergers and Acquisiton activity and a consistent pace of mega deals (deals valued in excess of $1 billion) in the quarter.
 Some interesting aspects of the Q3 results included the following:

  • Four of the five major Canadian banks announced large acquisitions for a total of $14.4 billion; three of the four acquisitions were of foreign businesses.
  • Almost all of the major Canadian pension funds announced transactions for a total of 12 transactions worth $8.8 billion.
  • Bucking a long-term trend, the value of Canadian-led acquisitions abroad exceeded that of foreign-led takeovers by a ratio of 2.5-to-1
  • Activity in the mega-deal segment was unchanged from the previous quarter at 9 transactions; total value of mega deals declined slightly from $28 billion in Q3 to $25 billion in Q4
  • The Real Estate, Oil & Gas and Industrial Products sectors were the key drivers of M&A activity in Q4 representing 59% of the overall transaction volume 

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