Despite the sub-prime mortgage woes in the U.S. that helped created a global credit crunch, 2007 was a banner year for merger and acquisition activity in Canada.
The number of mergers and acquisitions in Canada increased 16% in 2007 to 2,098 completed deals, according to a study by KPMG Corporate Finance, which is based on data from Thomson Financial. The value of deals completed was 50% higher than in 2006 and more than triple the total deal value in 2005.
Rio Tinto PLC's acquisition of Alcan was one of the largest deals at $37.6 billion. It was followed by a $7.7 billion private equity deal for Thomson Learning. BCE's deal to go private was not included because it has yet to be completed.
Canadian businesses also joined in the acquisition frenzy. They acquired 527 foreign companies and 1,086 domestic companies in 2007, in deals worth a total of US$132.6 billion.
KPMG said M&A activity will remain strong in 2008 with private equity and strategic buyers maintaining their interest in acquiring well-managed private and family-owned businesses.