TORONTO — Activity in Canadian corporate mergers and acquisitions is showing “ongoing strength,” albeit at lower levels than a year ago and in the wider world, according to the financial advisory practice of KPMG.
It estimated Monday that mergers and acquisitions worldwide in the first half of this year will total $771-billion (U.S.), 14 per cent above the volume in the first six months of last year.
In Canada, transactions from January to June 6 were valued at $39.2-billion (U.S.), down 13 per cent from $45-billion in the first half of 2004.
KPMG Corporate Finance said the number of Canadian deals that closed in the first half stands at 638, compared with 649 in the first half of last year.
The top Canadian deals in the first half of 2005 were TD Bank's acquisition of 51 per cent of Banknorth Group Inc., the merger of Adolph Coors Co. with Molson Inc., the takeover of Masonite by Stile Acquisition Corp. and Noranda Inc.'s consolidation of its ownership of Falconbridge Ltd.
Canada's 2005 numbers have not matched bullish hopes but are “consistent with the current backdrop . . . characterized by stable capital markets and a number of transactions in the form of income trust IPOs instead of traditional M&A activity,” commented Steve Smith, a partner in KPMG's corporate finance advisory practice in Toronto.
“The M&A market hit bottom midway through 2003 and while the downturn was steep, the recovery has been more gradual,” Smith said.
“A wave of high-profile deal announcements at the start of 2004 paved the way for a strong second half, and this strength has continued into 2005.”
Globally, the Asia-Pacific region experienced the greatest upturn in investment flows during the first half, up 39 per cent in deal value — and by 52 per cent in Japan.
Western Europe has closed 3,897 deals worth $298-billion, up 24 per cent from a year ago and ahead of the United States, which recorded 3,652 deals worth $279-billion, down 27 per cent.
