Feb 10, 2016
According to Janet Guttsman’s article in Canadian Lawyer Magazine, Canadian mining and energy companies may experience significant movement again this year as struggling firms sell or merge to stay afloat. A change in government, and in the rules governing hostile takeovers, will also likely play an interesting role in an already fairly complex mergers and acquisitions market.
Jeremy Fraiberg, Co-chair of Osler’s Mergers and Acquisitions Group, agrees with this assessment, also noting that a lower Canadian dollar is very likely to increase interest from foreign investors.
Fraiberg notes: “I think [the] Canadian M&A market is oftentimes reflective of how good those key sectors [mining and energy] are, but other sectors can certainly be strong and you could have the lower dollar inducing foreign bidders.”
Fraiberg adds: “Mining and oil and gas are areas where I think one might expect to see some deal activity, although commodities are under stress. Maybe the strong will buy the weak or some people will merge to create synergies.”
The new rules governing hostile takeovers in Canada will now give a target company a fixed, 120-day term to seek options to a hostile takeover bid, instead of waiting for a decision to come from a provincial securities regulator. While the new federal government has indicated that it wants to introduce a rather pro-business approach, it’s not yet clear how they’re likely to respond to takeover bids for companies deemed important to Canada.
Read Janet Guttsman’s full article, “Look for mergers uptick in 2016” in Canadian Lawyer Magazine, February 1, 2016.