The Financial Post reports in its Thursday edition that cheap debt, high valuations and piles of cash have been spurring a mergers and acquisitions spree so far this year in Canada, with the number of deals valued at more than $1-billion far ahead of last year's pace.
The Post's Stefanie Marotta writes that Canadian companies have been involved in 729 deals valued at a total of $158-billion as of May 31. Even as the economy continues to struggle under pandemic-induced restrictions, the stock market boom and low borrowing costs are encouraging companies and private equity firms to chase big deals.
In the first five months of the year, the volume and value of mergers and acquisitions has already blown past 2020's 586 deals at $36.2-billion during the same period, and is closing in on the 2019 high of 787 deals valued at a total $94.9-billion.
"The level of activity that we're seeing right now is unprecedented and when I go back two decades, this is the most active M&A environment that we've seen," said Sarfraz Visram at BMO Capital Markets. "We have a market with historically low interest rates and very high equity valuations, so the pieces are all there to have a really strong M&A market."
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