Billion-Dollar Deals in Global Assets for Canadian M&A in 2015

Emmanuel Pressman

Dec 23, 2015

Leading M&A practitioner, Osler’s Emmanuel Pressman, looks back on Canada’s 2015 M&A activity in an online article in Listed, the magazine for Canadian listed companies. According to Emmanuel, “There was massive foreign outbound activity. The really big, blockbuster deals for Canada this year…were actually not pure-play domestic transactions. They were all foreign bound.” Canadians buying abroad, as well as a hot IPO market, solid mid-market activity and strong private equity showing, have made up for a drop in high-end activity at home.

The article “M&A 2015: Canada shops the world” by Jim Middlemiss, published on December 14, 2015, explains how everyone, from retailers to banks, real estate firms, railroads and pension funds, was buying international assets in billion-dollar deals. Outbound M&A started the year strong and never looked back, with key deals from RBC, Borealis, Valeant and Canadian Pacific. Research firm Mergermarket reported that outbound M&A activity at the end of Q3 was worth US$125.4 billion – more than double last year’s deal value over the full year.

The global binge was in marked contrast to the slim pickings of the domestic market, where deal value was down 16.2% over the same period last year, and deal volume was also tracking south. During the first nine months of the year, Canada contributed just 4.2% to North American deal value, the lowest for the time period that Mergermarket has seen.

The problem, according to Emmanuel, is that we were expecting to see a lot more inbound interest in the oil patch. “There was very little inbound strategic investment, which surprised people.” He points out that in 2014 “Canada had more than its fair share of large, multi-billion transactions,” including the US$12-billion Tim Hortons-Burger King hook-up and BCE Inc.’s US$6.3-billion acquisition of Bell Aliant. In 2015, however, multibillion-dollar domestic deals have been scarce. Topping the deal list is essentially an asset shuffle, or “drop-down” deal, by Enbridge Inc. Whether Canada can make up for the lack of billion-dollar deals in the fourth quarter remains to be seen.

For the full account of inbound and outbound Canadian M&A in 2015, along with expert opinions from leading legal minds, read the Jim Middlemiss article: M&A 2015: Canada shops the world