CNOOC Ltd.'s proposed takeover of oilsands producer Nexen Inc. helped boost the value of Canadian M&A deals near record highs for the third quarter of 2012, according to a new study.
Deal values in the third quarter surged 16 per cent over the value of transactions in the same period last year, to $58.6-billion, says the latest review by PricewaterhouseCoopers.
Compared to the second quarter of 2012, the value of deals increased by 23 per cent.
But if the proposed CNOOC-Nexen transaction is excluded, deal values in Q3 of this year would have declined 22 per cent from Q3 of 2011 and 17 per cent from Q2 of 2012, according to PwC.
"The drop off in activity is attributable to an absence of targets in the market, rather than an absence of demand for deals," Nicolas Marcoux, PwC Canadian deals leader, said in a news release Thursday.
"Well capitalized corporate and private equity firms continue their hunt for strong middle market tuck under deals," he said.
Inbound and outbound transactions continued to be relatively strong, he added.
Inbound deals – foreign buyers targeting Canadian companies – were up more than 64 per cent compared to a year ago. But the CNOOC-Nexen transaction accounted for over 62 per cent of all inbound dollar values, says PwC.
When CNOOC-Nexen is excluded, foreign acquisitions of Canadian assets in the third quarter would have increased 26 per cent over the previous quarter, but would have dropped 38 per cent year over year.
Canadian acquisitions of foreign entities reached $18.9-billion in the third quarter of 2012, down 13 per cent from the second quarter, but 23 per cent higher than in Q3 of 2011.