TORONTO, Sept. 26, 2006 (PRIMEZONE) -- Blake, Cassels & Graydon LLP today released the results of an international survey on trends in mergers and acquisitions activity in Canada. Interviews with 125 Canadian executives and investment bankers from Canada, the United States and Europe found that M&A activity in the next 12 months is expected to exceed the record-setting levels set in both 2005 and 2006 year to date.
"The survey results show that M&A interest in Canada is increasingly a global phenomenon," said Craig Thorburn, Partner with Blakes in Toronto. "While the United States is expected to remain the single largest source of acquisition activity in Canada, China's rising influence as a global financial power is clearly demonstrated, with Canadian corporate respondents citing China and the U.S. as equal contenders for Canadian businesses in the next twelve months. Significant interest from emerging economies such as Brazil and India was also identified, underscoring the scope of interest in Canada expected to drive M&A activity to new heights."
The study, conducted for Blakes by mergermarket, the M&A intelligence and research service, surveyed 50 Canadian corporate executives from a variety of industries, 25 Canadian investment bankers, and 30 U.S. and 20 European investment bankers having familiarity with the Canadian market, providing a broad base to define consensus trends.
"With recent concerns expressed over the hollowing-out of corporate Canada, it was interesting that a majority of Canadian executives and bankers surveyed expect the rate of growth of IPOs and Canadian public companies to be sufficient to replace those companies acquired by non-Canadians," said Chris Hewat, Partner with Blakes in Toronto. "This indication of confidence from such a diverse and informed group was very positive."
Canadian merger activity reached a historical high in 2005, with 457 deals worth US$88 billion. In the first eight months of 2006 there have already been 293 deals worth US$106 billion, exceeding the value of all deals in 2005 by 20%. Blakes commissioned this survey in order to determine if market participants expected this trend to continue, and in which sectors they expect there to be the highest level of activity. A majority of respondents expect the energy sector will lead the way in overall M&A activity, while the mining sector is expected to be a close runner-up.
Private equity transactions are expected to continue to be a driver of M&A activity in the next 12 months, with large majorities in all respondent groups expecting the number of private equity transactions to increase. A majority of the investment bankers surveyed do not expect interest rates to rise to a level that could negatively impact the private equity market in Canada in this time frame.
Another factor fuelling continued interest in Canada is the durability of income trusts. While the federal government has announced changes to reduce the effective rate of tax on corporate dividends, income trusts continue to provide a more attractive investment vehicle for tax-exempt investors such as pension plans. Consistent with this, most respondents anticipate that the level of investment in income trusts will increase or remain the same.
For a copy of the study, please go to www.blakes.com/mergersandacquisitions.
About Blakes
Founded in 1856, Blakes has more than 500 lawyers with offices in Canada, the United States, Europe and China. In October 2005, and for the third consecutive year, Blakes was the only law firm named one of "Canada's Top 100 Employers" in Maclean's newsmagazine. The Firm's signature "Blakes means business" is not just a catch phrase, but a discipline that defines how Blakes helps clients achieve their business objectives.
Blakes has one of the largest and most experienced mergers and acquisitions practices in Canada. We are frequently retained by major domestic and international companies, financial institutions, private equity funds and leading international law firms to provide strategic counsel in M&A transactions.
More information on Blakes is available by visiting the Firm's Web site at www.blakes.com.
About mergermarket
mergermarket is part of The Mergermarket Group, which has over 400 employees worldwide and regional head offices in New York, London and Hong Kong.
mergermarket is an unparalleled M&A intelligence tool. In any market, the life blood of advisers is deal flow. mergermarket is unique in the provision of origination intelligence to the investment banking, legal, private equity, acquisition finance, public relations (PR) and corporate markets.
With an unrivalled network of analysts covering M&A in North America, Europe and Asia-Pacific, mergermarket generates proprietary intelligence and delivers it together with daily aggregated content, on its mergermarket.com platform and by real-time e-mail alerts to subscribers.
This wealth of intelligence, together with a series of deal databases, individual and house league tables, profiles and editorial have proven time and time again that this product can and does generate real revenues for clients. This is apparent when you see that mergermarket is used by over 1,000 of the world's foremost advisory firms to assist in their origination process.
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