Economic Gains, Energy, and Tech Sector Prospects Look to Drive

Economic Gains, Energy, and Tech Sector Prospects Look to Drive Canadian M&A

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NEW YORK and TORONTO, Feb. 27, 2018 /CNW/ - A majority of the 50 M&A dealmakers surveyed see Canadian M&A increasing in overall volume and value in 2018, according to a new study produced by Citi in conjunction with Mergermarket.

The report, Reaching New Heights: The outlook for Canadian M&A in 2018, finds that a growing economy, strong consumer spending, cash-rich corporate balance sheets, and firming oil prices will help to push domestic activity. Meanwhile, Canada's recent focus to cut down on its dependence on fossil fuel and provide technology funding is predicted to drive tech-based acquisitions for inbound and outbound activity in 2018.

Beyond the energy sector, tech looms large in the minds of Canadian dealmakers, especially when it comes to cross-border activity. Respondents in this survey said they expect Canadian firms to seek out foreign tech acquisitions - and for buyers from abroad to purchase Canadian tech as well. Meanwhile, an anticipated drive by corporates to enter new markets has dealmakers predicting that Asian countries will have the most cross-border targets for Canadian acquirers, and the most buyers of Canadian assets.

"As the uncertainty around NAFTA has increased, it is clear that there has been a shift in the target countries for cross-border M&A deals," said Grant Kernaghan, Managing Director at Citigroup Global Markets Canada. "Although the U.S. will always be an important market for Canada, as the report reveals Asia is expected to become more of a focus for outbound investment in the coming year."

Key findings of this report include:

  • Over three-quarters of respondents believe Canadian M&A activity will increase in 2018, both in volume (78%) and value (74%).
  • The energy sector was voted as the top area to see the biggest increase in both domestic and inbound M&A activity for 2018, while technology, media & telecoms M&A is expected to see the most for outbound activity.
  • Top challenges for Canadian dealmakers in 2018 according to experts include regulatory hurdles (44%), geopolitical and macroeconomic risk (42%), and uncertainty over the results of the NAFTA negotiations (40%).
  • Nearly half of respondents (46%) believe domestic activity in 2018 will be fueled by accumulated cash stockpiles at Canadian companies.

Click here to view the results and download the full PDF of the report

About Citi
Citi, the leading global bank, does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. In Canada, Citi is the country's most global financial institution with roots dating back to 1919. With an unmatched global reach, the company is uniquely positioned to enable the progress of its clients.

About Mergermarket
Mergermarket is a business development and market intelligence tool designed specifically for the M&A sector and provides proprietary intelligence and analysis on corporate strategy across the world. With around 200 M&A journalists talking directly to senior executives, dealmakers and other key players in over 60 locations globally, Mergermarket reports on the whole deal life cycle, from mapping out companies' early stage strategic intentions to tracking deals before they develop and providing real-time news on live events, thereby creating a large window of opportunity.  Subscribers can also mine for trends, patterns and deal ideas using Mergermarket's comprehensive deals database and regular data-driven editorial analysis and commentary. Visit to learn more.

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