It’s generally colder up north, but the bargain market in Canada is absolutely freezing.

By the numbers: M&A volume in Canada is down 46% from this point in 2021, an all-time high with around US$350 billion of activity, despite expectations of another strong year.

  • For context, US M&A is down 27% and global activity is down 20%, according to Refinitiv.
  • Also note that this is a strategic merger problem in Canada, as the country’s private equity activity is actually up 3% year over year.

State of play: Some of the decline can be attributed to chance and the macro slump. But many buyers and sellers are likely waiting on the sidelines as Canadian politicians and regulators debate new antitrust laws that could be much closer to international standards than Canada’s more monopolistic standards.

  • New rules were officially proposed in April and could be finalized as early as this summer.
  • In the meantime, something of an opening salvo, Rogers Communications has been sued by Canadian competition regulators over its proposed C$20 billion takeover of Shaw Communications – a merger that would have created the second largest mobile and cable operator in Canada, a country where consumers pay tallest in the world cellular service bills.
  • Rogers pledged to fight regulators, but later adopted a slightly more cooperative tone in which he agreed not to close the merger until the impasse was resolved (yes, how very Canadian of them).

In context: Reuters reports that Canadian antitrust authorities have reviewed more than 1,500 mergers since 2009 and challenged only eight. It’s a record: Zero wins. Two pending. Six lost or settled.

  • Again, it’s less about the lawyers than about the laws they are responsible for enforcing.

The bottom line: We don’t spend a lot of time discussing Canadian deal activity. And it doesn’t look like that’s going to change anytime soon.