A new PricewaterhouseCoopers report finds Canadian deal-making was strong amidst a backdrop of confused capital markets and global financial turmoil in 2011’s second quarter.
A total of 836 Canadian mergers and acquisitions (M&A) announcements worth close to US$57 billion were announced – the strongest quarter for M&A in Canada since the credit crisis.
According to the report, M&A activity accelerated in the real estate sector in 2011’s second quarter, when 90 real estate deals worth US$9.7 billion and involving at least one Canadian entity occurred.
Deals this quarter were largely in developed Europe, Canada and Australia – a departure from last quarter which saw a handful of buys in emerging markets.
Kristian Knibutat, PwC's Canadian deals leader, said “Overall, this year has been a perfect storm for the Canadian deal market. However, it's interesting to note that many of the deals announced in Q2 can be traced to market sentiment last year.
“Given recent instability, we do expect deal activity to slow down, but we anticipate that Canada will fare better than many of its developed nation peers.”
PwC also expects Canada's western provinces to be especially resilient and to outperform certain global deal markets, like the U.S. and the U.K.
Wealth created from the "financialization" of commodities is anticipated to spur growth in the local consumer and energy sectors.
Jennifer Harrison