Despite some cut backs in M&A activity expected over the next 12 months, the results reported in Ernst & Young’s (E&Y) 19th edition of the Global Capital Confidence Barometer (the “Report”) make clear that Canadian executives remain optimistic about Canadian and global M&A markets. Canadian executives are traditionally thought to be very bullish on the Canadian and global economy, and it is suspected that the decline in deals since the last Report is a temporary and strategic step back for companies to “digest recent acquisitions and assess the changing global geopolitical landscape.” The current state of … Continue Reading
Canada’s stance on protectionism
Repeated headlines in the past year related to President Trump and his “America First” strategy and the struggles faced by British Prime Minister Theresa May as she leads Britain post-Brexit have convinced many that protectionism now pervades the new world order. Not only are restrictions on physical borders imposed, the flow of investments and trade are inevitable topics being negotiated vehemently by world leaders.
Despite the protectionist rhetoric expressed throughout the globe, Bank of Canada Governor Stephen Poloz argued that “committing to openness has always been the right choice” because “[Canada’s] history shows that it takes … Continue Reading
As we begin 2017, the 1,000 corporate and private equity executives surveyed for Deloitte’s M&A Trends Year-end report 2016 display optimism for the coming year. The survey was conducted in September 2016 and included participants from companies or private equity firms with annual revenues of $10 million or more, representing 18 industries.
Respondents expect a rebound year from 2016, with 86% of surveyed private equity and 71% of surveyed corporate dealmakers expecting to close more deals this year. Not only is deal volume expected to increase, but 64% of all respondents also expect deal size to increase. Divestitures appear poised … Continue Reading
In recent years, cross-border M&A activity involving Canadian companies has soared, and 2016 gave rise to a record high in cross-border deal value. In Q3 2016 alone, Canadian companies were involved in cross-border transactions worth over CDN$77.7 billion, easily eclipsing the CND$21.7 billion in deal value from the previous quarter and representing 41% of all Canadian announcements. In particular, outbound deal volume continued to outpace inbound deal volume by a ratio of 1.7:1, confirming to Ed Giacomelli, Managing Director at Crosbie & Company, “the strategic importance to Canadian corporations of growth by acquisition.”
As has been discussed previously, M&A activity in North America declined in 2016 as compared to 2015. A recent survey published by Toppan Vite and MergerMarket of 25 top US-based dealmakers regarding North American M&A in 2016 delves further into the reasons for this decline.
Roughly half of the respondents to the survey believed that the M&A market underperformed in 2016 and mainly attributed the decrease in North American M&A activity to the US presidential election, the United Kingdom’s decision to leave the European Union (Brexit), the political turmoil in Russia and Ukraine and depressed oil prices. … Continue Reading
As 2016 draws to a close, Ernst & Young has released its 15th edition of its Global Capital Confidence Barometer (the GCCB), which looks forward toward the trends and expectations in the M&A market for 2017. The GCCB is survey of more than 1,700 senior executives, including 52 Canadian executives, from large global companies located in 45 countries around the world, representing 18 industry sectors.
This past year was an active time for M&A and according to the GCCB, this trend will continue into the new year. In total, 57% of all executives surveyed plan to make acquisitions … Continue Reading
In the days leading up to the June 23, 2016 Brexit referendum, we discussed Brexit’s potential impact on the M&A market: Britain without the EU: how will Brexit affect dealmaking? Today, we take a look at how those predictions have held up five months after the historic vote.
Domestic UK M&A down 62%
As predicted, economic and political uncertainty has created a hostile deal environment for domestic UK M&A. According to Thomson Reuters, the value of deals between UK companies has dropped 62% since the vote to a 30-year low. A lack of large deals may be to blame … Continue Reading
After the record breaking year that was 2015, MergerMarket’s 2016 Half-Year Edition reports that M&A activity in the first half of 2016 has fallen by 10% in total deals and 30% in deal value compared to the same time last year. Despite this decline, 2016 should be looked upon favourably so far, considering the worldwide political instability it has faced with the United Kingdom’s decision to leave the European Union (Brexit) and the uncertainty surrounding the United States Presidential election. Both of these events have contributed to a decrease in the volume and value of transactions in 2016. … Continue Reading
MergerMarket Group recently published its September edition of Monthly M&A Insider which reported on mergers and acquisitions activity around the world for the month of August 2016. More than two thirds into the year, August was no exception to the recent rather sluggish growth in M&A activity, especially compared to the record-breaking year for M&A in 2015.
August saw a total of 946 deals worth US$182.2bn, the lowest-valued August since 2013 (US$152.7bn) and down 34.7% from August 2015’s US$278.9bn. The Energy, Mining & Utilities sector spearheaded activity by contributing 15.8% to the total global market share with 84 … Continue Reading
On June 23, 2016, Britain voted to leave the European Union. Financial analysts throughout the globe are bracing themselves for the potentially wide ranging ramifications of the Brexit referendum, many calling Brexit one of the most extraordinary financial events in history. As stated in our last post regarding this subject, Britain’s exit is creating a further drag on mergers and acquisitions. KPMG has noted that six (6) M&A deals that the firm was working on have been put on hold. Moreover, inbound deals into Britain have dropped by more than 50% since the first quarter, amounting to a bleak $13.1 … Continue Reading
On June 23, 2016, Britons will be heading to the polls to determine whether or not the UK should remain a member of the EU. Given the stakes involved, the referendum is likely to have an impact on M&A activity in the UK, both before and after the vote.
This is not the first time the UK has held a referendum on this question. In 1975, the British electorate voted in favour of the UK remaining a member of the European Economic Community (the predecessor of the EU) by a majority of 67%.
However, this time the results … Continue Reading