The value of merger and acquisition activity in Canada remained low during the first half of 2010, down 30% from the first half of 2009.
According to data compiled by mergermarket, total Canadian M&A activity totalled US$29.6 billion for the first six months of 2010, down from US$42.5 billion in the same period last year.
A lack of mega deals – those worth more than US$500 million – contributed to the decline, dropping from a peak of US$91.8 billion in the second half of 2007 to US$18.1 billion in the first half of 2010.
Despite a decline in value, deal volume remained strong. The first half of the year recorded 210 announced deals compared with 153 in the same period last year.
Energy deals represented 49% of Canada’s total M&A deal value and accounted for 27% of total deal volume in the period.
The energy, mining and utilities sectors represented 65% of the total value of deals involving inbound investment from foreign firms. About 78% of the value of deals came from the U.S. and China as corporate entities in both countries vie for stakes in Canada’s natural resources.
Some of the biggest deals included China’s Sinopec acquiring a 9.03% stake in Syncrude Canada for US$4.65 billion, Shaw Communications’ $1.96 billion acquisition of CanWest Global Communications' television assets and Quadra Mining acquiring FNX Mining Company for US$1.3 billion.