Grant Thornton recently released its 20th annual International Business Report on M&A in which it suggests the market for M&A looks strong both globally and in Canada, as businesses look to invest cash resources built up over a period of slow M&A activity. Based on our experience, we have certainly noticed an increase in M&A activity since late 2011 and early 2012.
The report surveyed 12,000 businesses in 40 economies and shows that businesses worldwide are more interested in M&A today (34%) than they were in 2010 (26%). The report found 42% of Canadian businesses are planning a merger or acquisition within the next three years, compared to 37% in the United States. Brazil was the only country with similar interest at 40%. Access to geographic markets (63%) and building scale (57%) remain the most common motivations for M&A activity globally.
This comes as the Globe and Mail reports the value of M&A involving at least one Canadian company so far this year is up 22% over last year to $68.6 billion, with domestic only deals amounting to $28.7 billion.
M&A activity south of the border looks positive as well, with Paul Weiss LLP reporting $82.93 billion in US M&A activity in April, up almost 39% over the previous month. Average deal value was also up 104.9% to $236.9 million, despite a 24% decrease in the number of deals.
We remain optimistic about M&A activity for 2012 as we witness the growing M&A deal pipeline.