Sep 22, 2016
Ten years after concerns the Canadian economy was becoming oversaturated with foreign influences amid corporate takeovers, Canadian companies are completing an unprecedented amount of global mergers and acquisitions of their own, according to a Report on Business article in The Globe and Mail. In their article, Ian McGugan and Barrie McKenna detail the reasons for the recent surge in foreign investments by Canadian enterprises — which is the opposite narrative that played itself out a decade ago — and examine the associated risks and rewards from both a foreign and domestic perspective.
Although Canadian direct investment abroad rose to unprecedented levels last year, according to the article, the perception still exists that the idea of a “mega transaction” only applies to foreign acquirers of Canadian businesses, not vice-versa. Robert Yalden, Co-chair of Osler’s National Mergers and Acquisitions Practice, calls this misconception the “Canadian M&A paradox.”
“A lot of folks involved in public policy debates worry that Canada is getting the short end of the stick or losing more than its fair share of head offices,” Robert tells The Globe and Mail. “But year after year, Canadian companies are making acquisitions abroad at a pace and dollar volume that consistently surpasses the inbound activity.”
The article goes on to explain the recent Canadian penchant for extremely large deals and weighs the pros and cons to these types of investments.
If you subscribe to The Globe and Mail online, you can find out more by reading Ian McGugan and Barrie McKenna’s full article “Canada Strikes Back” in The Globe and Mail’s Report on Business.