Bankers and lawyers who work on Canadian mergers and acquisitions breathed a bit easier this summer because M&A activity came back this spring after a sharp drop in the first quarter of 2010, according to the Financial Post Crosbie: Mergers & Acquisitions in Canada database
From April to June, 255 transactions worth $34.8-billion were announced, whereas the first quarter's 258 deals totalled only $24.1-billion.
Here's the rub: The six largest deals last quarter were made across borders -- which limits the number of mandates given to Canadian dealers. And as a side note, it makes the deals much harder to structure because of tax implications. Not so much fun for the analysts and associates who model the cash flows.
These cross-border deals include CGI Group Inc.'s $1.1-billion (U.S.) acquisition of Stanley Inc. and Brookfield Asset Management Inc.'s $2.6-billion acquisition of General Growth Properties, Inc.
Despite the bump in activity, the $34.8-billion total value might drop early this fall because it includes deals such as Alimentation Couche-Tard Inc.'s hostile takeover bid for Casey's General Stores, Inc. which is up in the air until the shareholders' meeting in September.