Europe a surprising bright spot for Canadian M&A

The Globe and Mail

The Euro sculpture is seen in front of the European Central Bank in Frankfurt, central Germany, in this Nov. 30, 2005 file photo. (MICHAEL PROBST/AP)

A recent tally of Canada’s M&A deals in the second quarter revealed some surprising results. Despite the barrage of news flooding in each day about the volatile European markets, that area of the world was a bright spot for deals involving at least one Canadian unit.

Europe proved to be the most popular place for buyers to invest in the second quarter, with acquisitions in the region accounting generating $15.1-billion of value, according to PwC – that’s the highest amount since before the financial crisis and more than $5-billion more than the first quarter of the year.

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Couche-Tard’s bid for Statoil Fuel and Retail business in Scandinavia, for example, was bought as a base from which to grow the company’s Central and Eastern European business.

During the second quarter, a total of 721 M&A announcements were made involving at least one Canadian company, and these were worth a total of $47.7-billion. Volumes fell by 7 per cent in the quarter over the year prior – the same percentage decline noted in the first part of this year.

Still, the PwC numbers indicate there may be reason for optimism: the value of foreign-market acquisitions (both in Europe and beyond) was strong at $21.8-billion. And while the number of “mega deals” fell, the number of middle-market deals grew again (by 21 per cent), as did the values of those deals (by 35 per cent).