TORONTO—Canadian companies announced $15.1 billion worth of mergers and acquisitions (M&A) in Europe during Q2 2012—a post-econo-crisis quarterly high.
Overall, the quarter saw Canadian firms active in a number of foreign markets. $21.8 billion of acquisitions were announced in 40 countries outside of Canada, including 27 growth markets, one of the highest outbound deal values on record.
“Canadian firms are combating slow domestic growth by making acquisitions abroad,” says Nicolas Marcoux, Canadian Deals leader at PwC. “Quite often, M&A can be utilized as a tool to achieve growth as well as a means to innovate.”
The middle market segment of the Canadian M&A market also picked up steam during Q2 with 51 transactions worth $12.2 billion, up 21 per cent and 35 per cent respectively over the prior quarter.
Other data in the PwC deals report include:
- The second quarter saw 721 M&A announcements worth $47.7 billion. Year-over-year deal volumes and values declined 14 per cent and 4 per cent, respectively.
- Decline in “mega deals” led the overall drop-off in announced M&A during the second quarter—the aggregate value of M&A transactions worth more than $1 billion dropped by $4.8 billion, or 16 per cent, compared to Q1.
- Ontario overtook Alberta as the most popular province to make an investment. By value, 41 per cent of announced deals were in Ontario compared to 36 per cent in Alberta. A key reason for the change was because of fewer large deals in Alberta’s oil sands.
- By sector, real estate and energy continued to see a flurry of M&A activity while diversified financials made a comeback as a result of deals in the insurance and banking industries.
- Activity in the metals and mining sector dropped to represent just five per cent of Canadian M&A activity by value, largely due to a decline in commodity prices and a slowdown in demand for resources, especially from China.
- Cancelled deal activity dropped to a record low in the quarter despite shaky markets. There were only 12 deal cancellations in Q2.