Pipeline, utility deals fuel jump in Canadian M&A activity

Thu Apr 7, 2016 12:54pm EDT
 
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By John Tilak and Euan Rocha

TORONTO (Reuters) - Acquisitions in the utility sector and a major cross-border pipeline transaction helped drive the volume of Canadian M&A activity up 48 percent in the first quarter of 2016, even though the number of deals declined.

Thomson Reuters data released on Thursday showed the overall number of deals in the period fell 18 percent to 511 from a year earlier, while the deal value surged to $67.9 billion from $45.9 billion a year ago.

The top three deals in the quarter - TransCanada Corp's TRP.TO acquisition of Columbia Pipeline Group CPGX.N, Fortis Inc's FTS.TO buyout of ITC Holdings ITC.N and the merger between Waste Connections Inc WCN.N and Progressive Waste Solutions BIN.TO - accounted for nearly half of the total deal value.

The heightened cross-border deal flow propelled Goldman Sachs GS.N, Lazard LAZ.N and Wells Fargo WFC.N to the top three spots.

"I do think you will continue to see more Canadian companies looking for growth opportunities in the U.S. market," said Darin Deschamps, co-head of Wells Fargo Securities Canada.

"And we will continue to see equity investors supporting management teams in companies that have acquisitions that are on strategy and drive a company's strategic objectives."

Morgan Stanley MS.N, Bank of Nova Scotia BNS.TO and Barclays BARC.L rounded out the top six spots in Canada in a quarter that also saw some significant deals in the retail and media industries. In the quarter, Lowe's Cos LOW.N struck a deal to buy Rona Inc RON.TO and Corus Entertainment CJRb.TO agreed to acquire sister entity Shaw Communications Inc's SJRb.TO media arm.

The top three law firms in the league tables that advised on deals with Canadian involvement were Simpson Thacher & Bartlett; Osler Hoskin & Harcourt LLP; and White & Case LLP.   Continued...