Breaking News
LAST CHANCE for Cyber Monday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Canadian M&A jumps 28% in third quarter, market volatility could slow deals

Stock MarketsOct 07, 2021 03:17PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: The moon rises behind the skyline and financial district in Toronto, November 25, 2015. REUTERS/Mark Blinch/File Photo

By Maiya Keidan and Shariq Khan

TORONTO (Reuters) - Canadian mergers and acquisitions activity for the third quarter hit its highest since 2016 as historically low interest rates and strong equity markets helped companies to revive transactions that were put on hold due to the pandemic.

Dealmaking rose 27.7% to $76.6 billion in the third quarter of the year, but was significantly down from the record $120.3 billion recorded in the first three months of the year, according the Refinitiv data.

Bankers said while factors underpinning M&A exists and pipelines are strong, equity market volatility could slow the deal momentum.

"Higher deal flow in the third quarter was driven by a combination of factors including strong equity markets, historically low borrowing costs and market confidence in a gradual COVID-19 recovery," said Jake Lawrence, Group Head and CEO, Global Banking and Markets, Scotiabank.

However, he said short term inflationary and supply chain concerns are unlikely to have a material impact on deal flow given investor focus on long-term strategic considerations.

Transportation and infrastructure-focused deals led activity in the third quarter, with $33.6 billion in M&A activity, including Brookfield Asset Management's A$9.57 billion ($6.95 billion) bid for Australia's AusNet Services, and Brookfield's $3.4 billion planned takeover of Dexko Global Inc.

Higher inflation in Canada and the United States has stoked worries about central banks dialling back pandemic-era liquidity support and prospects of higher interest rates. That has increased stock market volatility.

"I guess the big threat that's overhanging the M&A landscape is the threat of rising interest rates," said Sarfraz Visram, head of Canadian and international mergers & acquisitions at Bank of Montreal.

"M&A is a lot easier to do when everybody is enjoying a strong equity market but I would say that valuation multiples were getting pretty high ... it was hard to justify doing deals at peak multiples," he added.

Of the deals announced in the first nine months of 2021, Bank of America Corp (NYSE:BAC)'s BofA Securities Inc, Bank of Montreal's BMO Capital Markets and Toronto Dominion Bank (NYSE:TD)'s TD Securities Inc took the top three spots in the advisory rankings.

Despite the strong stock markets, equity offerings fell for the second consecutive quarter, almost halving in the third quarter to C$6.8 billion ($5.42 billion) from the previous quarter, while IPOs dropped by nearly a tenth in the third quarter to C$332 million from the previous three months.

($1 = 1.2549 Canadian dollars)

Canadian M&A jumps 28% in third quarter, market volatility could slow deals

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email