FP Dealmakers: Foreign firms gobbled up record number of Canadian companies in 2019

A number of Canadian companies were bought out by rivals or private equity firms last year

It may not have been a blowout year for mergers and acquisition activity in Canada, but foreign companies feasted on domestic companies in record numbers.

Financial Post Data shows international firms acquired 247 Canadian companies last year for a combined value of $59.6 billion — it is at least a 10-year record both in terms of number and value of deals, according to our research.

It was a busy year for gold miners too, who were seen courting multiple partners, compared to the battered oil and gas companies — that have historically dominated M&As tables — but struggled to catch the eye of investors in 2019.

A number of Canadian companies also exited the public market last year, too. WestJet Inc. said goodbye to quarterly earnings and retail investors by agreeing to a takeover by private equity giant Onex Inc. Cineplex Inc. is also set to disappear from the Toronto Stock Exchange after its pending acquisition by U.K.’s Cineworld Group Plc. Meanwhile, online gambling company The Stars Group Inc. agreed to be absorbed by U.K.’s Flutter Entertainment Plc last year.

Here are Canadian M&A deals in numbers:

• Canadian M&A deals fell 4 per cent to $255 billion last year, compared to $266.7 billion the year before. Deal count fell 10 per cent compared to 2018, as global trade uncertainty, policy instability and a federal election meant parties were inclined to see how the events unfolded before they plotted their next move.
• Surprisingly, there were more deals valued at more than $1 billion in 2019, compared to 2018, suggesting that corporates other went big or stayed home. There were 51 deals exceeding $1 billion, compared to 48 in 2018. However, a nearly 24 per cent drop in deals valued between $5 million to $100million in 2019 ensured it would be a slower year compared to 2018.
• About all that hand-wringing regarding Canada Inc.’s lack of competitiveness: A record number of foreign companies thought otherwise and bought Canadian companies with a combined value of just under $60 billion. In 2018, that figure stood at roughly half to $32 billion across 217 deals. Americans were also not deterred by our presumed lack of competitiveness and swooped in to buy 178 companies with a combined value of $36.7 billion (versus $15.1 billion for 166 companies in 2018).
• Canada’s diversified financials sector was the most popular hunting ground for invesors, accounting for $50.8 billion worth of deals across 58 deals — it’s best year ever, FP data shows. WestJet Inc.’s run in public markets ended last year.
  Gavin Young/Postmedia
• In terms of the number of deals, real estate management and development notched up 386 M&A transactions valued at US$33 billion collectively.
• Among major sectors, oil, gas and consumable fuels sector saw 49 deals that generated $16.4 billion, compared to 123 deals amassing $41.5 billion in 2018 — or a 60.5 per cent plunge in value. It was the slowest year for oil and gas M&A in at least 10 years.
• It was gold’s year to shine, as the yellow metal miners put together $26.2 billion in value on 43 deals, compared to 34 deals in 2018 on just over $12 billion. It was gold’s best year in a decade.
• The biggest Canadian M&A deal of 2019 of the year was Thomson Reuters deal to sell data and analytics company Refinitiv for $16 billion deal to the London Stock Exchange Plc. Regulators are expected to make a decision on the deal in a few months.
• The Toronto-Dominion Bank sold TD Ameritrade Holding Corp. to U.S. brokerage firm  Charles Schwab Corp. for $14.9 billion, making it the second biggest M&A deal of the year. The transaction is subject to regulatory approvals. The cash pile will likely give TD the fiscal cushion to go back to the M&A market.
• The biggest completed M&A deal of the year in Canada was Newmont Corp.’s purchase of GoldCorp Inc. for $13.3 billion. The gold industry has not looked back since that landmark deal.