Canada M&A deals drop 15 pct in Q3 as sellers wait

Wed Nov 14, 2012 12:52pm EST
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* Q3 deal volume down 15 pct from Q2, 25 pct on year

* Deal value of C$40.5 bln was up 18 pct from Q2

* Big CNOOC/Nexen deal skews data

TORONTO, Nov 14 (Reuters) - The volume of merger and acquisition activity in Canada slowed 15 percent in the third quarter from the second as market uncertainty held back prospective deals, though a blockbuster bid by China's CNOOC Ltd for oil producer Nexen Inc helped boost the overall value of transactions, a report showed on Wednesday.

There were 195 deals announced in the third quarter, the first time M&A activity fell below the 200-transaction mark since the first quarter of 2009, according to a report by investment banker Crosbie & Co. That's a 15 percent drop from the second quarter and a 25 percent year-over-year decline.

But the total value of transactions climbed 18 percent to C$40.5 billion ($40.4 billion), due mostly to the quarter's largest deal, CNOOC 's proposal to acquire Nexen , valued at C$15.4 billion.

"In the resource sectors, volatile commodity prices and lower financing activity led to lower M&A activity, whereas industrial products was flat," Ed Giacomelli, managing director at Crosbie & Co, said in a statement.

"It appears that in many sectors activity level has more to do with sellers being in a holding pattern than it does with buyers being reluctant to transact," he said.

The real estate and oil-and-gas sectors were the most active in the quarter, with 39 deals each, but that was still down from 58 deals and 44 deals, respectively, in the previous quarter.   Continued...