Recent reports by Mergermarket and Pricewaterhouse Coopers
(PwC) have confirmed the positive forecasts for
M&A transactions in Q2 2014. Globally, deal volume has
reached its highest level since 2007. North America, in
particular, has seen a strong amount of activity with a number of
megadeals listed in the top 10 deals in the world.
North American M&A Review
Mergermarket recently published its Monthly M&A Analysis Insider detailing the
robust increase in deal value in Q2 2014. In North America,
there was a 40.6% increase over Q1 2014 in M&A value. In
total, there were 1,291 transactions worth US$430.1 billion.
The report highlights upward movement in key sectors in North
Pharma, Medical & Biotech: This sector
accounted for the largest share of the North American M&A
market by volume with 125 deals valued at $106.8 billion. This is a
20% increase by value and a 28% increase by volume from Q2
Telecommunications: This sector saw just 12
deals cumulate a value of $81.3 billion. This is a huge increase
over last year when deals totalled $732 million. These
telecommunication transactions represent a remarkable 11,005%
increase over Q2 2013 deal volume.
Energy, Mining & Utilities: In this
sector, there were 179 deals worth $383.2 billion. This
represents an uptick over this time last year. There was a
189% increase by value and a 58% increase by volume in this sector
over Q2 2013.
Consumer: In Q2 2014, there were 105 Consumer
sector deals worth $20 billion. The value and number of deals
has remained consistent over this time last year. Q2 2014
represented a 2% increase in volume and a 5% decrease in value from
M&A Activity in Canada
PwC reports in its Capital Markets Flash that a strong equity
market, cheap financing, and healthy cash balances have created a
ripe market for Canadian M&A activity. Q2 2014
represented an increase of 10% over Q1 2014 deal volume and
value. Recent transactions have been driven by demand for
cash-rich balance sheets.
Q2 2014 is notable for the increase in volume and value of big
deals (deals of over $1 billion). They have increased 10% by number
and 39% by value in Q2 2014. Accordingly, domestic deals have
declined 28% since last quarter.
Commodities and energy are the sectors that are leading the
Canadian M&A market. Continuing the momentum from Q1
2014, the largest deal announced in Q2 was in the pharmaceutical
sector. The pharmaceutical industry lends itself to high
volume deals because of the great value locked in intellectual
property acquisitions. Activity in this sector is likely to
continue thanks to the availability of cheap financing for
Despite the upward trend in M&A activity, a handful of
potential deals in the telecommunications and consumer sectors
turned sour in early August. Whether these failed deals are
the heralds for a decrease in M&A activity remains to be
The author wishes to thank Denise Gan, articling
student, for her assistance in preparing this legal
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