Mergers Hit $166-Billion Last Year
Date: Tuesday, February 28 2006
Globe and Mail Update
Merger-and-acquisition activity in Canada jumped 47 per cent to a near-record $166-billion last year amid “ideal market conditions,” investment banker Crosbie & Company Inc. said Monday.
All told, there were 1,244 announced transactions in 2005 — a rate of more than three a day, seven days a week, and a 42-per-cent increase over the 875 deals in 2004.
Thirty-four “mega-deals,” or transactions valued at more than $1-billion, contributed to the increase. They totalled $103-billion compared with 35 mega-deals valued at $48-billion in 2004.
Mergers and acquisitions rang up their strongest year since 2000 on the back of a robust North American economy, accessible financing, strong balance sheets and attractive valuations for sellers, Crosbie said. Almost half of the value of last year's deals were in natural resources.
“With a strong wind in its sail, the M&A market has raced to one of the best years on record,” said Ed Giacomelli, Crosbie's managing director said in a statement. “In contrast to the record year in 2000, the current M&A market is more broadly based and is still behaving rationally.”
The fourth quarter of 2005 saw a number of large hostile takeovers, lead by Barrick Gold Corp.'s $10.4-billion (U.S.) bid for Placer Dome Inc., creating the world's largest gold producer.
[Proofreader's note: this article was edited for spelling and typos on March 1, 2006]