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Suncor Energy head office is pictured in Calgary, Alberta June 17, 2009.

Todd Korol/Reuters

A mellower proxy battlefield and heightened interest in wobbling companies both inside and outside Canada's oil patch are some of the key trends that Toronto law firm Torys LLP sees for 2016 in the world of mergers and acquisitions.

In a report being officially released on Tuesday, the Bay Street firm also says private equity firms are increasingly shopping for infrastructure projects, and that Canadian investors may continue to be tempted by the emerging practice of "special purpose acquisition companies," or shell companies set up solely to acquire an unnamed target firm.

Over all, M&A around the world was up dramatically over the past year, with the total value of global deals at more than $3-trillion (U.S.). But, as the Torys LLP report points out, M&A in Canada plummeted from $160-billion worth of deals in 2014 to just $45-billion this year as of Nov. 1, thanks to weak prices for oil and other commodities.

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So the big deals for next year also appear to be concentrated elsewhere: Torys expects big Canadian investors such as pension funds and others to continue making big acquisitions overseas to the tune of at least $96-billion.

Back home, with oil prices remaining low, it should come as no surprise that the weakness in the oil sector, while deadening M&A interest in Canada over all, also creates opportunities for bargain-hunting investors looking for "distressed" assets.

While pointing out that oil prices have already started to bite, resulting in insolvency filings for energy companies such as Laricina Energy Ltd. and Southern Pacific Resource Corp., Torys LLP predicts there will opportunities in other sectors, too, such as mining and retail.

On proxy fights, Torys predicts that while shareholder activism continues to grow in Canada, the number of shareholder battles that blow up into publicly disclosed proxy contests will continue to decline, after hitting a peak in 2012.

But this doesn't mean that boards are simply beating back activist shareholders, Torys says. It often means that management and shareholders are meeting behind the scenes, the report says, with companies trying to assuage their critics before an all-out war breaks out. And this, Torys concludes, is both likely to continue and is good for shareholders and companies.

"An activist's agenda may reflect 'short-termism' of a kind that no responsible board could support, but not always," a group of Torys lawyers led by James Scarlett wrote in one paper included in the M&A trends report. "Activists are often well informed and may be able to provide insights on strategy, market or other factors that the board and management should be considering."

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