92 days, 587 deals, $55 billion: PwC’s Q3 Canadian M&A roundup

View this page in: Français

PwC outlines four trends to watch for in Q4

TORONTO — Canadian M&A activity rose sharply in the third quarter of 2013 on a value basis, to US$54.8 billion from US$38.9 billion in Q2, according to PwC’s Capital Markets Flash released today. Volume was actually some 6% down on Q2, the advance has been at the high end of the market where Loblaw’s $13B acquisition of Shoppers Drug Mart led the quarter’s nine $1B+ deals to account for a whopping two-thirds of the total.

By sector, retail took the top spot with 3 of the largest 5 deals in Q3, the Loblaw/Shoppers deal being accompanied by CPPIB and Ares Management’s $8.7B purchase of high-end US retailer, Neiman and Hudson Bay’s $2.7B acquisition of Saks. Continuing the trend of the first half of the year, oil and gas and mining sectors remained quiet on a value basis.

Julian Brown, former Deals Partner and PwC’s Corporate Finance Leader for the Americas says, “Despite political uncertainty in the US, businesses are clearly confident in the recovery of the US consumer market and this is translating into deals in consumer-driven sectors, retail being the most direct beneficiary.”

While the near term outlook for M&A in Canada is subject to a lot of uncertainty given the shaky nature of the global recovery, PwC’s Capital Markets Flash notes certain areas where the future looks clearer:

  1. Canadian pension funds and real estate players will continue to acquire assets both locally and globally.
  2. The Canadian middle market, which has been a consistent and stable source of deals nationally throughout economic ups and downs, is also poised to continue to fill the domestic deal pipeline.
  3. Economically diverse Canadian regions that have performed well during the slowdown in the natural resources sector will continue to be characterized by steady growth and stability.
  4. The effect of China’s appetite for foreign acquisitions, while temporarily absent from the natural resources sector will begin to show itself in other sectors, notably agribusiness, a sector of significant importance to the Canadian economy.

For more information, including a full copy of PwC’s Capital Markets Flash, which reviews and discusses Q3 2013 deals and trends more comprehensively, please visit: http://www.pwc.com/ca/deals. A copy of the report is also available from the media contacts.

Follow PwC on Twitter at @PwC_Canada_LLP and on Facebook at http://www.facebook.com/pwccanada.

About PwC’s Deals Team
PwC’s Deals Team (www.pwc.com/ca/deals) helps clients to achieve deal success — from concept to close and beyond. As part of the world’s largest Transaction Advisory practice1, the PwC Canada Deals Team is your gateway to an exciting new world of emerging M&A opportunities.

About PwC Canada
PwC Canada helps organizations and individuals create the value they’re looking for. More than 5,700 partners and staff in offices across the country are committed to delivering quality in assurance, tax, consulting and deals services. PwC Canada is a member of the PwC network of firms with more than 180,000 people in 158 countries. Find out more by visiting us at www.pwc.com/ca.

© 2013 PricewaterhouseCoopers LLP, an Ontario limited liability partnership. All rights reserved. PwC refers to the Canadian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

1 Source: Kennedy; “Business Advisory Services Marketplace 2012”; © BNA Subsidiaries, LLC. Reproduced under license.