RBC leads banks in slow year for Canada M&A, share issues

Thu Jan 9, 2014 7:15am EST
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By Cameron French and Euan Rocha

TORONTO Jan 9 (Reuters) - Royal Bank of Canada led investment banks in advising on equity issues and mergers and acquisitions in Canada in 2013, but share issues overall rose only slightly in the year and M&A activity fell hard.

In a year in which gold prices plunged and base-metal and oil industry activity was hit by uncertainty over global economic growth, the total value of M&A deals in 2013 fell by 31 percent to US$144.7 billion, according to data released by Thomson Reuters on Thursday.

"We saw a pretty significant decline in activity in both the energy and mining sectors, which have over the last five to 10 years accounted for half to two-thirds of the Canadian M&A market," Peter Buzzi, co-head of M&A at RBC, told Reuters in an interview.

Equity issues were dominated by a few large deals, with Barrick Gold Corp's C$3.1 billion ($2.87 billion) secondary offering a standout in an otherwise quiet mining sector. Stepping in to partially fill the gap on the M&A and new issues side were retail and real estate players.

All told, data showed banks completed 340 equity deals worth C$34.2 billion, up from C$32.2 billion in 2012, according to Thomson Reuters league tables for 2013.

RBC, which is typically at, or near, the top in all banking categories, led in both M&A and in equity issues, including initial public offerings.

The bank, Canada's largest, advised on 57 M&A deals with a total value of US$32.6 billion, leading for the second straight year and working on deals such as grocer Loblaw Cos C$12.4 billion takeover of Shopper's Drug Mart Corp and the US$6 billion purchase of Neiman Marcus Inc by two pension plans.

RBC also was the clear leader in debt issues in 2013 as low interest rates and favorable market conditions led to a banner year for corporate and government debt in Canada in 2013.   Continued...