* Q3 deal volume down 15 pct from Q2, 25 pct on year
* Deal value of C$40.5 bln was up 18 pct from Q2
* Big CNOOC/Nexen deal skews data
TORONTO, Nov 14 The volume of merger and
acquisition activity in Canada slowed 15 percent in the third
quarter from the second as market uncertainty held back
prospective deals, though a blockbuster bid by China's CNOOC Ltd
for oil producer Nexen Inc helped boost the overall value of
transactions, a report showed on Wednesday.
There were 195 deals announced in the third quarter, the
first time M&A activity fell below the 200-transaction mark
since the first quarter of 2009, according to a report by
investment banker Crosbie & Co. That's a 15 percent drop from
the second quarter and a 25 percent year-over-year decline.
But the total value of transactions climbed 18 percent to
C$40.5 billion ($40.4 billion), due mostly to the quarter's
largest deal, CNOOC 's proposal to acquire Nexen
, valued at C$15.4 billion.
"In the resource sectors, volatile commodity prices and
lower financing activity led to lower M&A activity, whereas
industrial products was flat," Ed Giacomelli, managing director
at Crosbie & Co, said in a statement.
"It appears that in many sectors activity level has more to
do with sellers being in a holding pattern than it does with
buyers being reluctant to transact," he said.
The real estate and oil-and-gas sectors were the most active
in the quarter, with 39 deals each, but that was still down from
58 deals and 44 deals, respectively, in the previous quarter.
The CNOOC deal is under review by the Canadian government
and if approved would represent the fifth-largest foreign
acquisition of a Canadian company, the report said.
CNOOC was not the only mega-deal in the quarter. There were
eight transactions valued at more than C$1 billion in the
period, including the C$3.1 billion acquisition of ING Bank of
Canada by Bank of Nova Scotia, as well as
Valeant Pharmaceuticals International Inc's C$2.6
billion takeover of Arizona-based MedicisPharmaceutical Corp
China-based Sinopec International Petroleum Exploration and
Production Corp was also active, acquiring a 49 percent stake in
Talisman Energy (UK) Ltd from Talisman Energy Inc for
"It is noteworthy that Canadian companies were involved on
the buy side in seven of the 10 largest transactions this
quarter," Giacomelli said.
"As uncertainty subsides, we feel that buyer appetite for
acquisitions will grow, which will lead to an increase in
Canadian companies continued to be active as both buyers and
sellers of businesses in the quarter, but acquired foreign
businesses in greater number than foreign-led takeovers of
Canadian companies, the report showed.
International deals accounted for 54 percent of all M&A
volume - the highest level since the first quarter of 2004 - and
played a role in 11 of the 12 largest transactions in the
quarter, the report said.