Original Source: Advisor.ca

M&A Shook Off Tariff Woes in Q3: Crosbie & Co.

Author: James Langton

Deal volume climbs, “mega” deals push transaction value to new heights

Despite ongoing economic uncertainty, merger and acquisition activity picked up in the third quarter, according to new data from Crosbie & Co. Inc.

The volume of M&A rose by 8% in the third quarter, and total deal value was up to $145 billion, an increase of 28%, on a quarter-over-quarter basis.

The surge in deal value was driven by 20 “mega” deals (transactions valued at over $1 billion), which accounted for a record $127 billion in quarterly deal value — including three deals worth over $10 billion, headlined by the $38.4 billion acquisition of Teck Resources Ltd.

“Despite a continuation of the cautious mood of the last few quarters, it seemed like M&A began to shift positively in Q3 with strong activity for larger, higher quality companies in tariff insensitive sectors,” said Crosbie & Co., in a release.

“This started last quarter but there may also now be a shift in psychology under way with dealmakers adjusting to the realization that tariff and geopolitical uncertainties are unlikely to subside anytime soon,” it added. “Accordingly, companies are increasingly realigning their M&A strategies to succeed in this new environment.”

“It also didn’t hurt to have the support of continued positive momentum in the equity markets and increasing expectations for interest rate reductions on both sides of the border,” the firm noted.

The tech sector led the way in deal count, with 110 transactions in the third quarter, up from 83 deals in the second quarter.

There was also an increase in deals in the materials, health care and utilities sectors, the firm reported.

By value, the mining sector led the way, thanks to the Teck deal, followed by the utilities sector, which hosted a $27 billion transaction.

Crosbie & Co. noted that cross-border M&A remained a major contributor to overall deal activity, accounting for 44% of deal volume and 73% of total deal value — with deals across the Canada–U.S. border producing 65% of cross-border volume and 58% of total value, which is, “in line with historical averages,” it noted.

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