M&A Top Trends 2013: Overview

From Foreign Investment to Shareholder Activism – and Everything in Between

The year 2012 saw foreign investors compete for Canada's oil and gas assets, and Canadian investors pursue international transactions at record levels. In Canada, weak share prices and undervalued businesses encouraged hostile M&A activity. Activist shareholders campaigned for companies to address corporate governance issues and, in some instances, to break up or spin off their businesses. And these shareholders used proxy fights as a means of provoking these transactions. There was also significant transaction-related litigation in the United States and Canada.

In 2013, we predict that the risks associated with engaging in overseas transactions – risks such as those relating to enforcement issues, expropriation and fiscal concerns – will cause Canadian acquirors to focus on mitigating those risks as they transact abroad. For foreign investors seeking to invest in Canada, we expect that recent policy updates and the continued uncertainty surrounding Canada's foreign investment review regime will increasingly prompt them to modify their investment
strategies and manage risks in order to minimize the prospect of non-approval.

In Canada, we expect that hostile bidders will face more challenges in contested transactions if the Ontario Securities Commission's proposed "poison pill" rule changes are implemented. This new regime would allow target boards to keep poison pills in place for a longer period of time. With the OSC's expected changes, we predict that proxy battles will become the new norm in bid tactics as an alternative to, or in combination with, hostile bids. In any event, proxy battles will continue to be deployed by activist shareholders, and we foresee that both the number of activist-driven transactions and the incidence of shareholder litigation will rise in 2013.

Torys looks ahead to the 5 trends that will shape business in 2013. 

Trend 1: International Transactions

> Canadian acquirors will focus on mitigating risk as outbound deals increase

Trend 2: Hostile Bids

> Hostile bids will become more difficult as target boards "just say slow"

Trend 3: Shareholder Activism

> Activist-driven transactions will increase

Trend 4: Deal Litigation

> Shareholder litigation will rise

Trend 5: Foreign Investment

> Foreign investors will change their investment strategies to compete for Canadian oil and gas assets


Torys' M&A Practice

Torys' M&A Practice is highly regarded for its experience in sophisticated, complex and innovative mergers and acquisitions. We are involved in high-profile transactions, both public and private, for companies of all sizes. On cross-border and global M&A transactions, we provide seamless service to clients in the United States, Canada and internationally.

The members of the M&A Practice have the expertise to advise on all of the areas of law that pertain to M&A transactions, including corporate; securities; litigation and dispute resolution; competition and antitrust; taxation; foreign investment issues; regulatory matters, including stock exchange requirements; and employment, pension and benefits issues.

For further information about our M&A Practice, please contact us.


John Emanoilidis

Cornell Wright

New York

Karrin Powys-Lybbe


Scott Cochlan

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