Multi-billion-dollar deals driving Canada’s 2021 M&A boom

Canada’s M&A activity is flourishing in 2021, with the volume and value of deals already surpassing 2020’s figures for the same period, according to a report in the Financial Post. As this year’s numbers close in on the levels reached in 2019, co-head of Torys’ M&A practice John Emanoilidis said if financing continues to remain available, he expects the rest of the year to remain a strong one for M&A.

John’s comments come in an article by the Financial Post that says the “Canadian companies have been involved in 729 deals valued at a total of $158 billion as of May 31 … In the first five months of the year, the volume and value of mergers and acquisitions has already blown past 2020’s 586 deals at $36.2 billion during the same period, and is closing in on the 2019 high of 787 deals valued at a total $94.9 billion.”

John said that while Canada usually plays at the mid-market level, the larger transactions he’s seen has shown there’s confidence in the market.

“Historically, most M&A activity in Canada tends to occur at the mid-market level, but we’ve seen these very large, multi-billion-dollar transactions which can drive the overall deal market,” John said.

“They are the best indicators of overall confidence.

Read: Read our team’s analysis on the role ESG is playing in M&A transactions.

“If financing continues to remain readily available and markets are strong, then this will continue through the balance of the year and, given the pipeline of deals that we have in the office, I would expect we’ll finish off the year as a very strong one for M&A.”

The article also said buyers are attempting to entice sellers into exclusive deals as a way to bypass the auction process.

“Buyers are becoming more assertive in this environment and they’re pushing for exclusivity, particularly if they have a strong balance sheet and can deliver execution certainty,” John said.

“There’s a great deal of money that’s chasing deals and you’re seeing very competitive auction processes, and buyers are aware of that, so if they can position themselves in a way to gain exclusivity, they’ll try to do that.”

Learn more about our M&A work on the practice page.