October 6, 2016 / 1:52 PM / 2 years ago

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

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.

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

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

The biggest deal of the year so far is Enbridge Inc’s (ENB.TO) 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 and Agrium Inc AGU.TO 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.

“We’re starting to see a slow but steady rebound in the resource sectors, and that generally leads to more M&A and fundraising,” said Bruce Rothney, chief executive of Barclays Canada.

“There’s some evidence of a turning point in mining and, to a degree, oil and gas.”

Barclays advised Agrium and Spectra on their respective blockbuster deals.

Other highlights of the year include TransCanada’s (TRP.TO) $10.2 billion acquisition of Columbia Pipeline Group and Fortis Inc’s (FTS.TO) proposed $11.3 billion purchase of ITC Holdings Corp ITC.N, which is expected to close by the end of the year.

Reporting by John Tilak; Editing by Bernadette Baum

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