TORONTO: Canadian mergers and acquisitions got off to their strongest start in 17 years in 2017 as cross-border deal activity picked up pace, with JPMorgan JPM.N, Goldman Sachs GS.N and RBC RY.TO taking the top three spots in the advisory rankings. Foreign banks further consolidated their position in Canadian deal-making as companies looked beyond borders for growth opportunities. Toronto Dominion TD.TO and Lazard LAZ.N rounded out the top five positions in the league tables, according to Thomson Reuters data released on Thursday.
Deal value in the first quarter of 2017 jumped 12 percent to $75.4 billion, making it the best first quarter only behind the same period in 2000. Sizeable cross-border deals included AltaGas Ltd’s ALA.TO planned acquisition of WGL Holdings WGL.N for C$8.4 billion ($6.25 billion), and MacDonald Dettwiler and Associates Ltd’s MDA.TO C$3.1 billion deal buy U.S.-based satellite imagery provider DigitalGlobe Inc DGI.N. “The results are reflective of the strong market we have for cross-border deals,” said David Rawlings, head of JPMorgan Canada.
Canadian companies “certainly want exposure to the United States. Our clients want to diversify outside of Canada,” he added. Energy sector deals dominated the league tables, with domestic oil companies scooping assets of foreign oil majors. ConocoPhillips COP.N agreed to sell its oil sands and natural gas assets to Cenovus Energy Inc CVE.TO for C$17.2 billion, while Royal Dutch Shell RDSa.L offloaded most of its Canadian oil sands assets for $8.5 billion. Canadian Natural Resources Ltd CNQ.TO was the main buyer of those assets. “The large energy deals are strategic, chessboard-type transactions,” said Brian Hanson, chief executive of Lazard’s Canadian investment banking division. “We expect more energy activity and more energy consolidation, but it may not be in a straight line, particularly if energy prices are volatile,” he added.
