Following an unusually long drought, Quebec has grabbed the spotlight and turned itself into a major hub for mergers and acquisitions.
Few people saw this coming. At the start of the year, pretty much everyone expected deal volumes to come from resource-heavy western Canada. Quebec, as it has been for many years, was an afterthought.
Yet the province’s deal volume picked up early in January when Cominar Real Estate Investment Trust and Canmarc REIT, both Quebec-based companies, merged. Since then, some of Canada’s biggest deals have come from Quebec, including: the $3.4-billion sale of Astral to BCE Inc., Couche-Tard’s $2.8-billion (U.S.) acquisition of Statoil Fuel & Retail, and most recently, CGI Group Inc.’s $3.3-billion bid for Logica.
No one’s saying that all these deals have cropped up as part of a big trend. The reasoning for each is quite different, and the takeovers have been spread across sectors. But having four relatively big M&A transactions come from Quebec is a big deal considering that the province didn’t have one in the top 10 last year.
Are the recent volumes a sign that bankers have focused too much on western Canada? Not exactly. Companies west of Ontario continue to pump out deals, such as Viterra’s sale to Glencore International. But Quebec’s resurgence reiterates just how important it is to keep pitching clients in every sector and in every province, because you never know when they’ll do a deal.