The changing M&A game

May 20 - Financial Post (Canada) - Despite the slowdown in M&A activity, we are not at the beginning of a steep downturn in global dealmaking, according to a new report. However, the landscape has changed dramatically.

Relatively calmer financial markets have coincided with a surge of activity in recent weeks: Mars Inc’s US$23-billion purchase of Wrigley Co. to create the world’s largest confectionary company; Westpac Banking Corp. Ltd.’s US$17.6-billion bid for St George Bank in Australia; and Hewlett- Packard Co.’s decision to acquire Electronic Data Systems Corp. for US$14-billion. But despite the expected recovery for M&A, it will not look like 2006 or 2007, Citigroup’s global equity strategy team said in a report. Read More.

Canadian banks scouting for buying opportunities

March 27 - Dealscape Blog (The Deal) - Outperforming their American rivals these days -- thanks to the U.S. credit crisis -- Canada's banks are on the prowl for acquisitions south of the border -- but don't expect them to ride to the aid of troubled U.S. banks. Reuters reported Wednesday that Royal Bank of Canada, the country's largest lender, is cautiously eyeing the M&A landscape to the south, though it is not interested in buying an investment or corporate bank, but rather wealth management and private banking.

"Yes, we are interested in being an opportunistic buyer, but not in the capital markets side of the business," RBC president and CEO Gordon Nixon told a Canadian financial services conference in Toronto. Although RBC is primarily looking at wealth managers, Nixon added, however, that banks are always considering large, transformational deals. Read More.

Canada's small private equity sector stays healthy

February 12 - Reuters - Deal-making in Canada's small private equity industry remained healthy in the fourth quarter, data showed on Tuesday, even as the once high-flying sector largely ground to a halt south of the border as financing dried up.

Buyouts of Canadian companies worth $2.3 billion were reported in the three months ended Dec. 31, up 64 percent from the same quarter in 2006, Canada's Venture Capital and Private Equity Association said in a statement.

"Following the credit crunch in midsummer and the retreat within the very large mega-deal segment, many industry observers had expressed concern," said Rick Nathan, president of the CVCA and managing director of private equity firm Kensington Capital Partners. Read More.

Appetite remains for Canada mining M&A -analysts

January 22 - Reuters - Canadian metals producers may delay launching takeover bids until the current market turmoil has subsided, but analysts say there is still M&A demand in the sector despite weaker stocks and tight credit conditions.

The analysts say that even though higher debt costs could linger for some time, cash and stock deals could still go ahead, particularly as gold prices sit near record highs, and base metals prices have been steady despite a steep slide in several mining stocks. Read More.

Mining M&A frenzy to continue

January 16 - National Post (Canada.com) - The only certainty in an uncertain market is that the wave of mining takeovers will continue. That's the opinion of mining analysts at Citigroup Global Markets, who cite a number of reasons why: soaring cash balances, few reinvestment opportunities, frictional barriers to new capacity, and aggressive forays by sovereign investors.

They calculated that mining companies have more than US$300-billion available for M&A, about half of which would come from borrowings. That alone is about 36% of the entire sector size. Read More.

Plenty of possible M&A in forestry sector

January 14 - National Post (Canada.com) - Call it green or call it black – Richard Kelertas thinks you should be able to find some colour other than red in forestry stocks this year.

Sino-Forest Corp., Catalyst Paper Corp. and TimberWest Forest Corp. top the list of buys for 2008 at Dundee Securities. The analyst’s top sells are Fraser Papers Inc., Tembec Inc. and AbitibiBowater Inc.

“Our current picks favour timber/log and private timberland since markets are currently experiencing uncertainty and volatility, Mr. Kelertas said in a recent research note. “With the steady and reliable returns that private timberland and log/plantation development provides investors over time, we are quite comfortable with our call.” Read More.

Raising capital likely tougher this year

January 8 - Globe and Mail - After another record-breaking year for raising capital in 2007, private equity funds are in for a much tougher slog this year due to continuing effects of the credit market collapse.

A whopping 1,279 new funds are out worldwide trying to raise a total of $698-billion (U.S.), nearly double the amount sought at this time last year when market conditions were much better, says British-based research firm Private Equity Intelligence.

Many funds are holding interim closings, letting them start investing while trying to reach their fundraising targets. Read More.

M&A will remain high in '08 and shouldn't be feared since Canada can keep up

December 19 - The Canadian Press - CEO Peter Marrone, who transformed his Yamana Gold into the world's fifth-largest gold miner through two major deals this year, says investors should stop fretting about the "hollowing out" of corporate Canada and embrace consolidation secure in the knowledge that the country's young industries have the muscle to keep growing.

While it's true that many well-known Canadian brands were swept up by big multinationals in a record-breaking year of billion-dollar mergers in sectors from mining to oil and gas to entertainment and retail, that doesn't mean the country is being sucked dry, Marrone says.

"People have talked about the hollowing out of Canadian industry going back probably the better part of the 25 years that I've been in the financial world," he says. Read More.

Canada's M&A activity seen strong for rest of year

November 13 - Reuters - Mergers and acquisitions in Canada stayed buoyant in the third quarter, data showed on Tuesday, and should remain so for the rest of the year, driven by strategic buyers but also the resurgence of private equity groups.

Canadian companies announced transactions worth C$91 billion ($95 billion) in the third quarter, according to data compiled by Toronto niche investment bank Crosbie & Co. and the Financial Post newspaper.

That's the second-highest quarter on record in terms of value and was largely driven by the announcement of aluminum producer Alcan Inc's US$38.1 billion purchase by Anglo-Australian metals giant Rio Tinto. Read More.

M&A Outlook 2008: Cross-border bonanza

November 7 - Dealscape Blog (The Deal) - Mohr offered some color on trends. This year, she said, really represents the high-water mark of where M&A is globally. Overseas is where the growth lies. In 2007 to date, she said 45% of global M&A has been cross-border. It should be somewhere in the high 40% range by the end of the year. While Europe and U.S. have historically driven this, growth in the rest of the world has almost doubled over recent years. In the second quarter of 2007, there was $800 billion in global M&A volume. In the third quarter, it dropped to $400 million. The fallout largely came from the U.S. and Europe, she said, while volume from the rest of the world was essentially flat. The role of emerging markets and their companion sovereign wealth funds are driving a lot of this. Sectors where activity is hot include: financial services, energy and power, and industrials.

For buyers looking to the U.S., the current climate may make M&A prospects more attractive. Because of the credit crunch and the depressed U.S. dollar, cross-border strategics may see this as a good time to invest in the U.S., Hartman said. Read More.

Life after the great credit crunch

The heady times for M&A specialists came to a crashing halt in August. With the big takeover show over, corporate lawyers are turning to new plays - many on paths out of the deal desert

October 24 - The Globe & Mail - When Steve Halperin surveyed his calendar in early August, he had every reason to believe the torrid season of deal making would continue.

He and his partners at Goodmans LLP had nailed an unprecedented number of big mergers and acquisition deals, including the record-breaking bid for BCE Inc. by the firm's client, Ontario Teachers' Pension Plan. Behind closed doors things were even busier as he juggled three secret takeover assignments. Read More.

Canadian M&A rockets 81%

September 24 - Financial News - Canadian mergers and acquisitions surpassed last year's record by 81% on mining and energy pacts, as this morning's activity hit more than $8bn (€5.67bn).

Abu Dhabi National Energy announced today it will buy Canada’s PrimeWest Energy Trust for $5bn, while Canada’s Yamana Gold ended a long-running drama over its three-way hostile deal for Meridian Gold by snapping up the rival gold miner for $3.56bn while folding in its previous acquisition of Northern Orion Resources, valued at just over $1bn. Read More.

Flurry of deals carves up a Canadian industry

With foreign players knocking, energy executives say there's still a place for independents

September 10 - The Globe & Mail (Canada) - Canada's nascent wind power business has caught the attention of foreign players, who have been steadily buying up domestic companies as the industry consolidates into fewer and fewer hands.

While more buyouts are expected, wind energy executives say there is still room for small independent wind developers in an industry that is finding its feet in a burgeoning market for alternative energy sources.

This summer, two very different foreign players grabbed a foothold in the Canadian wind business. In June, U.S. investment bank Lehman Brothers bought a big stake in private Toronto wind and solar power developer SkyPower Corp. for an undisclosed sum. Read More.

Mergers can survive without private equity: Rubin

September 7 - Financial Post (Canada) - If mergers and acquisitions are going to continue to drive stocks higher, forget about getting much of a boost from private equity buyout firms.

These firms had been playing an increasingly important role during the buyout boom earlier this year and were involved in big deals, like the takeover of Bell Canada Inc. and Chrysler. Now, though, they appear to be withdrawing from the market.

According to Jeff Rubin, chief economist and chief strategist at CIBC World Markets, global private equity deals hit a peak of about US$150-billion in May, but then declined substantially in June and again in July. In Mr. Rubin's words, they then fell off a cliff: In August, there were just US$17.8-billion of private equity deals, a tiny fraction of their former glory. Read More.

Canadian mergers hit record, but may have peaked

August 29 - Reuters - The value of mergers and acquisitions involving Canadian companies surged to a record in the second quarter, data showed on Wednesday, but that could be the peak of a year-long buyout binge.

Companies announced transactions worth C$202 billion ($191 billion) in the quarter, more than double the previous record of C$89 billion set in the third quarter of 2006, according to joint Financial Post and Crosbie & Co. data.

Even without the boost from two blockbuster transactions -- the announced buyouts of telecommunications group BCE Inc and aluminum producer Alcan Inc. -- the three-month period to June 30 would still have been a record. Read More.

Canada: Private equity buyouts hit record levels

August 15 - National Post - The value of private equity buyouts in Canada for the first half of the year has already far exceeded the value for all of 2006, the Canadian Venture Capital Association said Wednesday.

In the first six months of 2007, 96 Canadian buyout transactions were announced with a value of $61-billion -- $13.8-billion of which was outside the record-breaking $47.2-billion Bell Canada buyout, the CVCA said.

That compares to 101 buyouts valued at $11.6-billion in all of 2006, it added. Read More.

Canadian M&A activity hits record in 2006

February 26 - CBC News - Canadian companies were involved in a record $257 billion worth of merger and acquisition activity in 2006, according to an investment bank that tracks takeovers.

That eclipsed the previous M&A record of $234 billion set in 2000 during the height of the dot-com boom.

Investment bank Crosbie and Co. said private equity groups are taking a keen interest in the takeover market. Read More.