Yahoo Finance Canada M&A: Q1 deals blow past previous quarter
Canadian targets are attractive to foreign acquires to start the year, says a new report by Mergermarket.
First quarter deals were much larger compared to the fourth quarter of 2018. Although the total number of mergers and acquisitions fell.
There were 129 deals signed worth US$24.8 billion, up 94 per cent compared to the previous quarter’s US$12.8 billion through 153 deals.
The biggest first-quarter deal was U.S.-based Newmont Mining’s (NEM) $12.8 billion acquisition of British Columbia-based Goldcorp.
Some big deals that carried over from 2018 also closed in the first quarter, including one that was homegrown.
“In early January, Zijin Mining Group, a China-based, SHSE-listed, HKE-listed mining company,
completed its acquisition of Canada-based Nevsun Resources, announced late
in 3Q18. Zijin Mining Group acquired a 98.94% stake in the Canadian metal ore company for $1.2 billion,” said Philip Segal, senior analyst at Mergermarket, in the report.
Nearly a year after announcing a strategic review, Calgary’s Trinidad Drilling closed on its sale to Ensign Energy Services (ENSG).
“The sale represented an end to a contentious bidding war between Ensign and Precision Drilling, a Canada-based energy company, according to Mergermarket intelligence. Ultimately, Ensign acquired a 90.2 per cent stake in Trinidad Drilling for $676 million.”
Energy, mining, and utilities were the hottest sectors, with a combined 15 deals worth $16.5 billion. Some of the biggest included Australia-based Newcrest Mining’s $807 million acquisition of a 70 per cent stake in the Red Chris Mine; US-based Vistra Energy’s 497 million acquisition of Ontario-based Crius Energy Trust; and US-based KKR’s 49 per cent acquisition of SemCAMS ULC in Alberta for 389 million.
Real estate was a big target for Canadian investors looking outside of the country. More than $32 billion has been invested in properties.
“In 1Q19, Ivanhoe Cambridge and Oxford Properties Group, Canada-based investment and property companies, announced that they acquired US-based IDI Logistics, a developer of logistics and distribution warehouses, from Brookfield Property Partners for $3.5 billion
Brookfield had originally acquired IDI in 2013 from Kajima for $1.1.,” said Segal.
“Brookfield Asset Management has made acquisitions to diversify their holdings outside the country and across sectors. The company made headlines late in the first quarter, announcing its acquisition of a majority stake in Oaktree Capital, a US private equity firm that specializes in distressed debt, for 4.7 billion.”
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains
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