Yahoo Finance Canadian businesses snapping up beloved British brands
It’s not unusual to hear about American corporate giants buying up British brands. But news about acquisitions from their northern neighbours seems more rare.
However, in the past month alone, Canadian businesses have bought up legacy British brands including HMV and Cathedral City cheese.
On Friday, Canadian cheese giant Saputo (SAP.TO) announced it was buying Surrey-based Dairy Crest (DCG.L) for £975m ($1.3bn). Dairy Crest sells the UK’s most popular cheddar cheese – Cathedral City cheddar – along with Clover spread, Country Life butter and Frylight cooking spray.
A few weeks earlier, a Canadian retail mogul Doug Putman announced his purchase of HMV. Putman owns a similar chain of Canadian music stores called Sunrise Records and said he was “delighted to acquire the most iconic music and entertainment business in the UK.”
So far in 2019, foreign buyers have announced plans to acquire 77 British businesses worth about $7.5bn (£5.8bn), according to data from research firm Dealogic. Nearly one in 10 of those British businesses are being sold to Canadian firms or investors. About 20% of the value of the deals are being done by Canadians, with the bulk of the value coming from the Dairy Crest purchase.
READ MORE: Canada’s top pension fund giant bets on British shopping malls
Canadians were also in a buying mood last year, announcing nearly $15bn (£11.5bn) worth in British takeovers, or about 6% of all foreign takeovers in the country.
One of those deals stood out from the pack: the Canadian gold mining giant Barrick Gold bought London-traded Randgold Resources for about $6bn, creating a new company called Barrick Randgold (GOLD, ABX.T) at the start of this year.
Canadians may find it easier to buy UK firms as the countries share a language and have similar cultures. It also helps that the UK pound has declined by about 10% versus the Canadian dollar from its pre-Brexit referendum levels, making it cheaper for Canadians to do deals.
Canadians also own a range of businesses and brands you wouldn’t expect: Canada’s Ontario Teachers’ Pension Plan owns the UK National Lottery through its purchase of parent company Camelot Group in 2010. The pension giant also owns London City Airport and a £100m stake in Lloyds Bank (LLOY.L).
The Canada Pension Plan, one of the largest pension funds in the world, is also still actively looking for investment opportunities in the UK. It owns a range of British businesses, including shopping malls in Birmingham.
“We have continued investing in the UK since the [2016] vote,” said Alain Carrier, a senior managing director at the Canada Pension Plan Investment Board (CPPIB) in an interview with Yahoo Finance UK in January.
“We’ve managed to find opportunities which we think were priced interestingly and effectively for us,” he said.
The fund, which manages 368bn Canadian dollars (£214bn), has about 6% of its total investments in the UK.
