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Overview of M&A activity

Canada saw 576 M&A deals announced in 2020 valued at US$58.6 billion overall.2 These results represent the lowest aggregate deal value since 2013 with a decrease of 47 per cent on 2019 figures when 675 deals worth US$110.6 billion were announced.3 For the first half of 2020, M&A activity in Canada was highly impacted by the covid-19 pandemic. In the fourth quarter of 2020, M&A activity surged, with an aggregate deal value of 35.6 billion on 189 deals, representing 61 per cent of the total deal value for 2020.4 For the first half of 2021, M&A activity in Canada recovered to pre-pandemic levels, with the number of deals, in first half of 2021, increasing to 380 from 238 from the same period in 2020, and aggregate deal value increasing from US$16.4 billion in 2020 to US$131 billion in 2021.5

The most active sectors by deal count in 2020 were, for a third year in a row, the technology, media and telecom industries with 121 deals announced during the year for US$6.7 billion.6 Energy, mining and utilities was the most active sector by deal value with a market-leading US$19.3 billion or 33 per cent share of the total deal value and the second most active sector with for 86 deals announced with Centrica's US$3.625 billion sale of Direct Energy to US-based NRG Energy Inc among the highlights. 7

The Canadian private equity market continues to be a key driver of M&A activity in 2020, although it was also highly impacted by the covid-19 pandemic. Aggregate deal value was C$30.7 billion, which was 23 per cent below 2019's high of C$46 billion, while deal volume experienced a 15 per cent dip to 436 from 514 in 2020.8 Funds continue to fundraise actively, building on ever-increasing dry powder, and the market across Canada remains highly competitive, attracting interest from domestic and international investors. In 2020, the activity level in the healthcare, financial services and energy sectors continued its positive trend while the B2C and B2B sectors experienced a challenging year. The technology, materials and resources sectors saw a tightening of activity. Measured by total investment amount, the materials and resources and healthcare sectors were the hot sectors.9 Both the deal value and the number of Canadian private equity exits in 2020 continued the downward trend that started in 2019. Firms exited 56 companies for a total value of C$18 billion, representing a year-over-year decrease of 31 per cent in total activity and in total value.10