Thomson Reuters has released data based on the first six months of 2015, revealing that both the Royal Bank of Canada and Bank of Montreal led the land as advisers on merger and acquisition (M&A) deals in Canada.
The company noted that while the total number of M&A deals has declined in the last six months, dropping 13%, the dollar value has surged. In total, $122 billion (USD) in M&A deals were recorded, up 35% from last year. Reuters attributed one large deal – Enbridge’s transferring some if its energy assets to Enbridge Income Fund – as the reason for RBC and BMO taking the top two spots by value. The Enbridge deal was valued at a whopping $24.2 billion USD.
“We’ve got empirical data supporting the fact that investors are currently rewarding companies that are going out and doing big deals,” said Grant Kernaghan, Citigroup‘s managing director of Canadian investment banking.
“The overarching theme we see is that the level of cross-border M&A activity is only going one way, and that’s up,” said Bruce Rothney, chief executive of Barclays Canada. “We’re living in a slower growth environment. Everyone’s looking for organic growth where they can, but in a world where cost structure starts to take on increased importance, scale is going to be important and that’ll drive more M&A.”
“There’s more confidence in management suites and boardrooms that the recovery is more sustained,” said Dougal Macdonald, head of Morgan Stanley Canada. “Nonetheless, because it’s low growth, M&A has become a tool for companies to enhance growth and the markets are supportive and rewarding strategically and financially compelling M&A.”