Climate change has become a high profile issue that is expected to have significant implications for M&A transactions going forward. As public awareness and scientific understanding of climate change continues to evolve, we are more informed about the climate change-related risks that businesses must grapple with and get ahead of. As a result, businesses need to be especially diligent in their assessment of a range of factors that may be impacted by the changing climate when completing M&A transactions. While the risks that should be considered will, of course, vary between transactions, the following is a list of climate-related factors … Continue Reading
A recent report by Ernst & Young (the Report) has concluded that the power and utilities (P&U) is thriving, as global deal value in the first quarter of 2018 reached an all-time high of US$97 billion. This rise has predominately been driven by mega-deals, with only 15 deals forming 90% of the total global deal value in the P&U sector. Owners of P&U assets can continue to expect premium asset valuations and highly favourable transaction terms as investors compete for a limited amount of attractive investment opportunities within the sector.
The Report identifies the following factors as … Continue Reading
Canada continues to be an attractive market for private equity (“PE“) investors with recent transactions highlighting significant investments into Canadian real estate and energy infrastructure assets.
Partnerships (particularly, limited partnerships) continue to be a popular PE vehicle, providing a means of pooling and aggregating investment funds and allowing for income or losses to be “flowed-through” to its members for Canadian tax purposes, subject to certain exceptions.
However, the use of partnerships with non-resident investors in PE investments raises two particular issues.
Part XIII of the Income Tax Act (Canada) (the “Tax Act“), requires that … Continue Reading
The value of Canadian M&A activity in the first half of 2017 was the highest in a decade, according to a recent report from Bloomberg. The approximately $132 billion in total transaction value is the highest since the first half of 2007, when approximately $156.6 billion in transactions were completed.
According to the report, one of the most significant drivers of deal value was a sell-off of Canadian oil sands investments by foreign energy companies in the wake of declining prices for crude on global markets. Recent examples of such transactions include Royal Dutch Shell’s divestment of its interests … Continue Reading
On April 25, Mergermarket released its Q1 2017 Regional Flash Reports describing the M&A climate, trends and developments throughout the Americas during the first quarter of 2017.
The Canada’s Trend Report indicates that Canadian M&A has remained strong with 111 deals in Q1 2017 worth US$ 35.8bn. This is a robust start for 2017 as compared to the 151 deals in Q1 2016 representing US $17.1bn, and is in line with the trend of higher valuations for fewer deals as seen across the globe. The top Canadian sector for Q1 2017 was Energy, Mining and Utilities (EMU) with … Continue Reading
EY’s review of Q3 2016 deal activity within the power and utilities (P&U) sector shows ongoing stability to be expected into 2017. Highlights from the quarter include ongoing premiums on prices for regulated assets, increased investment in renewables and diversification into disruptive technologies.
Regulated network assets (i.e., transmission and distribution assets) are described as “safe havens” for investment, translating into transactions worth US $23.6 billion in Q3 2016. EY reports that this sum accounted for more than half of the quarter’s overall deal value. Investors view regulated network assets as stable with long-term returns in a … Continue Reading
According to a year-end report on M&A Trends published by Deloitte, corporate and private equity executives surveyed in the last quarter of 2016 anticipated significant M&A activity in 2017. Indeed, three quarters of survey respondents expect deal activity to increase in 2017 relative to 2016, and almost 65% expect deal size to increase. Aside from strategic reasons, the expected increase in the pace and size of transactions may be linked to high stock prices, continued low interest rates, and availability of cash held in reserve by large companies.
In the Canadian context, the Deloitte report suggests that U.S.-based investors … 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
According to MergerMarket’s Monthly M&A Insider Report, global M&A activity continued to wane throughout May 2016, maintaining the trend reported on earlier this year. May 2016 resulted in a total of 1,054 deals worth an aggregate of US$224.5 billion, down from the 1,410 deals valued at US$372.5 billion in May 2015. Energy, Mining & Utilities, the sector with the strongest showing, lead with 80 deals worth US$40.5 billion, representing a 66.8% increase in value (but a 17% drop in the number) from deals in this sector in May 2015.
The report highlighted the following regarding global M&A activity:… Continue Reading
2015 was an extraordinary year for global M&A activity. Mergermarket recorded almost 17,000 transactions worth a remarkable US$4.3tn. This topped the previous record set in 2014 by over 30%. The race for top performing sector this year was very close. Energy Mining & Utilities won with US$630bn in deal value; however, the top performers were only separated by US$150bn. The other four sectors in order are: Pharma, Medical and Biotech, Consumer, Financial Services and Industrial Chemicals.
Once again North American markets lead the way with almost 1/3 of global deals and nearly 50% of global deal value. The … Continue Reading
The first half of the decade has seen a swift rise in green-house gas (GHG) emissions in Asia. Consequently, China is now the world’s largest emitter of carbon dioxide from the consumption of energy, accounting for over 25% of global emissions. This rapid intensification has also created an active and robust renewable energy market in China and other Asian countries.
According to a report published by Mergermarket, the renewable energy market in the Asia-Pacific is poised for significant increases. In 2014, Asia-Pacific accounted for 23.2% of worldwide deal value in renewables, and in H1 2015 rose … Continue Reading
In its Global M&A Review, for the first nine months of 2015, Thomson Reuters reports healthy global M&A activity leading into the final quarter of fiscal 2015. The study reports increases in both deal value and deal volume across most jurisdictions and industry sectors.
Global increase in both deal volume and deal value
Thomson Reuters reports that global M&A has experienced its strongest first nine months since fiscal 2007. Year-to-date, global M&A topped US$3.2 trillion on just under 32,000 deals. Compared to the same nine month period in 2014, this represents a 32% increase in deal value and a … Continue Reading
Similarly to American M&A in the first half of 2015, the first half of 2015 was remarkably active on the global mergers and acquisitions front. According to a recent Mergermarket report, total deal value topped US$1.7 trillion. This represents an increase of 15.2% over the first six months of 2014, and only 15.4% behind the record-setting first half of 2007, when US$2.1 trillion worth of deals were completed. With 7,136 transactions, it is interesting to note that total deal volume actually decreased by 15.7% compared to the same time period last year, but higher valuations explained the market’s … Continue Reading
Now that we have entered the second half of 2015, it’s helpful to take a look at M&A numbers from the first half of the year and predictions for what lies ahead. A report recently published by MergerMarket provides a number of key data points and dealmaker survey results that may be a barometer for the direction of Canadian M&A.
In Q1-2015, the aggregate value of Canadian M&A deals was US $8.6 billion, spread over a total of 112 deals. This is the lowest quarterly aggregate deal value since Q4-2008, when a total of only 78 deals worth US $7.4 … Continue Reading
As was expected, the Organization of Petroleum Exporting Countries (OPEC) announced on June 5 that it will maintain its crude oil production at 30 million barrels per day. This is the second time in six months that OPEC has decided to maintain it crude oil production. This decision was made in light of declining oil prices that many people are attributing to an oversupply of oil. The drop in oil prices puts pressure on producers that use higher cost production methods, including many US and Canadian based producers. Commenters have suggested that the decision by OPEC to maintain … Continue Reading
Mergermarket published its M&A Monthly Insider for May of 2015 earlier this week, summarizing M&A activity around the world, and particularly in the regions of North America, Central and South America, Europe, Middle East and Africa, Asia-Pacific, and Japan.
To date in North America, there have been 1,516 deals worth US $407.2 billion. April 2015 saw 319 deals signed that were worth US $55.7 billion, which represented a 56.3% decrease in value compared to April 2014. Domestic M&A dominated North America for April 2015 with US $45.8 billion in deals. Cross-border M&A deals decreased in value compared to April 2014, … Continue Reading
Duff & Phelps recently released their May 2015 Mergermarket Report entitled Energy: Turning Volatility Into Opportunity. In it, they address the elephant in the room – namely, the recent fluctuations in the oil and gas industry. Five executives from different industry sectors were interviewed about the effect of current economic conditions on their business. Although note was made of recent upheavals in the industry, the report concludes that this has opened up opportunities in the sector which keen players may be well positioned to take advantage of.
Some key findings:
- Despite market fluctuations, energy M&A has risen by 19%
The decrease in the price of oil and resulting available capital may create a surge of investment in cleantech, renewable energy and electricity in Ontario, and Queen’s Park appears to be doing all that it can to aid this East-bound capital flight.
The Liberal government’s much publicized plan to liberalize the electricity sector and privatize 10% – 15% of Ontario Hydro, the Province’s transmission giant, is an attempt to both finance long-term infrastructure projects and take advantage of US investors looking to capitalize on an undervalued asset. The depreciated price for a non-controlling interest in a multi-billion dollar asset will … Continue Reading
The Mergermarket Group has published its Monthly M&A Insider – April 2015 report outlining trends and developments in M&A activity worldwide for the first quarter of 2015.
In North America, M&A activity continued on the upward trend set in 2014. The first quarter saw 1,116 deals valued at US $338.8 billion, which was a 11% increase compared to the first quarter of 2014. This increase was in no small part driven by the Heinz/Kraft deal, valued at $54.4 billion. The Pharmaceutical, Medical and Biotech industry was also a significant driver in the first quarter of 2015, which saw 122 deals … Continue Reading
Mergermarket, in association with RR Donnelley, has recently released the March edition of its Venue Market Spotlight (VMS) publication, presenting an overview of a study conducted on market participants’ expectations for corporate breakups in the near term. Corporate breakups or demergers, usually carried out in Canada by means of a statutory plan of arrangement or a similar reorganization transaction, are a way for a corporation to separate distinct self-sufficient lines of business from one another with a view to unlocking value and creating strategic focus, or a means to separate a specific asset from the corporation where such … Continue Reading
MergerMarket Group recently published a research report that presents the expectations of 50 industry experts based in the US and Canada on North American mid-market M&A activity. The report paints a promising picture for mid-market M&A opportunities over the next year buoyed by the increasing activity of private equity firms, cross-border deal flow along with ample financing alternatives.
Expectations in North America
Over eighty percent of respondents expected the number of North American mid-market M&A deals to increase, with the telecommunications, media and technology sector expected to see the greatest proportion of deal flow. The report emphasized a particularly healthy … Continue Reading
MergerMarket Group recently published its January edition of Monthly M&A Insider which reported on mergers and acquisitions activity around the world during the second half of 2014. Among other things, the report explains why 2014 was so hospitable to M&A activity, citing an improving economy, large cash reserves, low interest rates, and cheap financing as contributing factors.
Overall, there were 16,588 reported deals in the second half of 2014 worldwide, worth roughly $3.2 trillion; this surpasses the previous record, in the second half of 2007, of 16,060 transactions, worth roughly $3.7 trillion. Just under half of the total … Continue Reading
Forbes contributor, Michael Schwerdtfeger, recently commented that “2014’s dynamic merger & acquisition market is galloping right into 2015.” Citing various sources, he notes that 2014 was the strongest year for deal-making since at least 2008, with a 47% increase over last year. The overall value of deals in North America grew by nearly 55% due to a number of market factors, including large cash stockpiles, cheap financing, and a trend for large corporations to focus on external growth as opposed to increasing revenue with current business divisions. Schwerdtfeger highlights the three industries that saw the greatest growth: telecommunications and media, … Continue Reading
A look back on deal activity in 2014 undertaken by Mergermarket in its December 2014 Monthly M&A Insider reveals that North America dominated global deal value last year, hosting 48.1% of the value. Europe was next, with 27.3% of global deal value, but surpassed North America, dominating the global M&A scene in terms of deal volume.
In terms of industry sectors, Energy, Mining & Utilities led the pack with one-fifth of global deal value. The Pharmaceutical, Medical & Biotechnology, Industrials & Chemicals, Consumer and Telecommunications sectors followed closely behind. Global deal volume data reveal that the Industrials & Chemicals sector … Continue Reading