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Fewer Canadian mergers in 2010: KPMG Add to ...

The number of mergers and takeovers involving Canadian companies is expected to increase in the first half of next year, after a slight dip in 2010, says a report from KPMG.

The advisory firm said that next year terms and conditions will be the most important part of deals.

"Going into 2011, expect to see stronger participation from Canadian companies on a global mergers and acquisitions basis. The timing is perfect," Peter Hatges, president of KPMG Corporate Finance said in the report.

"Turmoil in European markets presents significant buying opportunities for Canadian companies backed by a strong Canadian dollar," he said.

KPMG says there was a small decrease in the number of deals compared to 2009, and estimates there were just over 1,800 completed transactions this year with a total value of between $114-billion (U.S.) and $117-billion.

The report says that although the total number and dollar value of the deals are down, they are consistent with other expected numbers around the world.

KPMG says the value of mining deals increased "dramatically" this year, with one third of all transactions being in the mining sector, and the majority of others being in energy and industrials.

Canadian companies were the buyer in seven out of 10 of the biggest deals in Canada this year, with all but two of the top deals being in the mining, or oil and gas sector.

The biggest single Canadian deal completed this year was the $6.8-billion acquisition of Red Back Mining by Kinross Gold Corp. .

"The high transaction values in this sector are not surprising, given strong commodity prices driven by the continued and increasing need for commodities from emerging economies," Brian Imrie, head of mining and metals for KPMG Corporate Finance said in the report.

"There will continue to be high transaction levels from domestic consolidation and high demand from foreign acquirers."

KPMG notes that the pace of activity picked up in the second half of 2010 as the result of improved conditions for raising money on the debt and equity markets.

The lower Canadian numbers for 2010 are the direct opposite of booming mergers and acquisitions in India and China. KPMG estimates those countries saw a 117 per cent and 31 per cent increase respectively in the number of inbound and outbound deals.

The Canadian Press

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  • Kinross Gold Corp
  • Updated August 18 4:18 PM EDT. Delayed by at least 15 minutes.

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