Canadian M&A activity hits highest since financial crisis in January-September

Thu Oct 6, 2016 9:57am EDT
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By John Tilak

TORONTO (Reuters) - Canadian merger and acquisition activity in the first nine months of the year touched their highest level since the financial crisis, buoyed by several big-ticket deals across a range of sectors, data from Thomson Reuters showed on Thursday.

M&A deal value jumped 17 percent to $209.7 billion in the period, up from $178.9 billion from a year ago, according to Thomson Reuters data. It was the best first nine months since 2007. Full-year figures will be available in January.

Morgan Stanley (MS.N: Quote), Barclays Plc (BARC.L: Quote) and Royal Bank of Canada (RY.TO: Quote) were the top three advisers for Canadian M&A in the period, followed by Goldman Sachs (GS.N: Quote), JPMorgan (JPM.N: Quote) and Bank of Montreal (BMO.TO: Quote). CIBC (CM.TO: Quote) took the third position among Canadian banks.

The biggest deal of the year so far is Enbridge Inc's (ENB.TO: Quote) planned acquisition of Spectra Energy Corp SE.N at about $28 billion (C$37 billion). A move by Canadian fertilizer producers Potash Corp of Saskatchewan Inc (POT.TO: Quote) and Agrium Inc (AGU.TO: Quote) to combine in a merger of equals was another highlight.

"Investors in the market broadly are strongly endorsing these deals. People are very supportive of strategic M&A," said Derek Neldner, RBC's head of Canadian investment banking, who noted that there were several transformational deals this year.

"Fundamentally we find M&A activity is driven by confidence - board of director and management confidence," he added.

RBC helped advise Potash Corp in its deal with Agrium, and Enbridge in its deal with Spectra.

After a lull in recent quarters, the traditional driver of Canadian deal activity - mining and resource M&A - has begun to pick up.   Continued...

A Royal Bank of Canada (RBC) logo is seen on Bay Street in the heart of the financial district in Toronto, January 22, 2015. REUTERS/Mark Blinch/File Photo