June/July 2010 / Array
Top Trends for Canadian Mergers and Acquisitions in 2010
Noting that even at the height of recent market turmoil Canadian banks remained relatively strong, the authors see signs of market stabilization in the Canadian M&A market. In an article written earlier this year, they list what they see as the significant trends in that market for the near-term future. Among them: Self-financing strategic buyers will have an advantage over financial buyers. Liberalized tax laws applicable to foreign investors will spur cross-border acquisitions.
At the same time, acquirers can be expected to be more diligent when it comes to understanding “underlying target businesses and prospects for success.” Canadian antitrust officials are likely to be more diligent, as well.
The authors also foresee a rise in transactions involving distressed investments; more hostile deals, spurred by depressed valuations; more large companies divesting non-core assets; a continued active private equity strategy by Canadian public pension plans; a final push for income trust M&A before 2011 tax policy changes; a focus on greentech, in part due to players in carbon-heavy” industries wanting to balance their portfolio; increased international acquisitions by Canadian companies, advantaged by a strong Canadian dollar; more middle-market activity; more deals being impacted by shareholders, including cases where boards turn to shareholders to block unwelcome bids; and some deal delays due to requisite national security reviews.
