Consulting firm says 836 deals totaling US$57 billion occurred in last quarter
TORONTO—Canadian companies had their strongest season of mergers and acquisitions since the credit crisis began in 2008, according to a report by PwC.
The consulting firm says 836 deals worth a total of US$57 billion were made between April and June, the majority in the materials, energy, and financial sectors, which accounted for 61 per cent of all deals.
“Capital markets are confused and the consensus is that the recovery is extremely fragile,” the report says, referring to the European and U.S. debt crises and the aftermath of the tsunami and the resulting nuclear disaster in Japan.
“It’s bad news all around – except for the Canadian merger and acquisition market.”
PwC says there have been 16 “mega deals” involving Canadian companies, worth US$1 billion or more this year. Those mega deals made up most of the value of market.
These include the world’s largest gold miner, Barrick Gold Corp.’s pending $7.8-billion acquisition of copper miner Equinox Minerals and a consortium made up of Research in Motion, Apple, Sony and Microsoft purchasing the patents of Nortel Networks for $4.5 billion.
There were also a number of smaller deals worth less than $100 million, mainly in Canada’s junior mining and energy sectors, the report says.
PwC says the number of deals should start slowing because of current market instability but adds Canada will do better than other developed countries.
However, it says resource-rich Western Canada will likely outpace deal markets in countries like the U.S. and U.K., as higher commodity prices spur growth.