Unstable markets drag Canadian M&A, debt issuance to four-year low

Canadian dealmakers are optimistic about a return to strength in the second half of the year after mergers and acquisitions (M&A) in the first quarter dropped to pandemic levels, belayed by higher borrowing costs and panic around a banking crisis.

The collapse of regional banks Silicon Valley Bank and Signature Bank in the U.S. tightened credit market making funding difficult for deals.

As the banking crisis abate and many global central banks move to the sidelines to assess the impact of rapid interest rates hikes, bankers are, however, betting that appetite for dealmaking would return.

“We expect the second half of the year really to be where stability hopefully comes back or some kind of certainty with respect to path forward comes back and what that we expect M&A to return,” said Sean Rowe, national deals markets and value creation leader at PwC Canada.

Canadian M&A volumes totalled $34.7 billion in the first quarter, down 52.3% from a year ago, with dealmaking off to the worst start since the same period in 2020.

This report’s information was first seen on REUTERS; to read more, click this link.