Canada M&A activity rises in Q3, mining deals ebb
TORONTO (Reuters) - Merger and acquisition activity edged higher in Canada in the third quarter as a wave of deal-making by pension funds and banks made up for a slowdown in the powerful mining sector, according to a report released on Friday.
Deal volume in the July-September period rose by 8 percent over the third quarter last year, and deal values climbed 1 percent, according to a quarterly report by PwC, a global consultancy that tracks M&A activity.
"A high level of activity by Canadian pension fund deal-making during Q3 2011 sheltered a broader Canadian market downturn," the consultancy said.
Canadian pension funds, either as leads, co-leads or part of buyer/seller consortiums, were involved in deals worth more than $15 billion, PwC said, highlighting a trend of foreign acquisitions by Canadian institutions.
Other notable deals in the quarter included the $6.3 billion acquisition of U.S.-based medical device maker Kinetic Concepts Inc by a consortium including the Canada Pension Plan Investment Board (CPPIB), PSP Investments and Apax Partners.
Also in the quarter Bank of Nova Scotia (BNS.TO: Quote) announced the acquisition of a 19.99 percent stake in China-based Bank of Guangzhou Co., Ltd, for about C$719 million.
Scotiabank, Canada's third-largest lender, is eager to expand its footprint in China, where foreign banks are limited to 20 percent stakes in no more than two Chinese banks.
Scotiabank also holds a 14.8 percent interest in Bank of Xi'an, and will increase that stake to 18.1 percent, pending regulatory approval. Continued...