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November 02, 2021 | M&A Reports 

Crosbie & Company Canadian Mergers & Acquisitions Report for Q3 2021

M&A Strong but Feeling the Pull of Gravity

M&A activity continued to moderate in the third quarter of 2021 with 917 reported deals, representing a decline of 7% compared to Q2 and the lowest quarterly level transactions we have seen over the prior three quarters.  However, despite this declining trend, the quarter was still the fourth strongest quarter on record with announcements that were well above pre-pandemic levels. From a value perspective, aggregate transactions announced remained strong at $98B, making it one of the five strongest quarters in the last 5 years.

“We have seen a modest pull-back in M&A announcements but there are still historically strong conditions and other ingredients driving the market,” said Colin Walker, Managing Director at Crosbie.  “Market conditions generally remain very supportive of continued strong levels of M&A activity in the coming quarters.  We also think the fourth quarter could also be positively impacted by some sellers trying to get their deals completed by year-end in anticipation of higher capital gains taxes,” he added.

Underpinning the quarter were nine mega-deals (deals with value in excess of $1B), collectively representing aggregate value of $74B.  The largest of these was Canadian Pacific Railway’s offer of $39.7B for Kansas City Southern which appears to have ended the bidding war with Canadian National Railway that has played out over recent quarters.  While lower than Canadian National’s previous bid, Canadian Pacific’s offer was accepted given greater certainty of being accepted by the regulators.  The other significant transaction in the quarter was Anglo Eagle Mines acquisition of Kirkland Lake Gold for $13.5B.

As always, the mid-market drove many market metrics.  Transactions with disclosed values below $250M represented approximately 91% of deal activity and 12% of deal value in Q3 2021.  In aggregate, this amounted to 353 transactions, which was 15% below the prior quarter. 

Cross-border M&A grew its share of total deal volume to 48% in Q3 2021, which represents the new high-water mark and may in part reflect the relaxation of foreign travel restrictions.  Additionally, as a share of total reported value, cross-border transactions increased to 75%, which is the fourth largest cross-border share of total deal value on record.  Outbound M&A activity (Canadian acquiror and a foreign target) continued to outpace inbound M&A activity by a ratio of 1.75:1.  Canadian firms have acquired 828 foreign companies year-to-date, which is roughly in line with the total number of outbound deals that occurred in the year of 2020. At roughly two-thirds of all outbound deal activity in Q3 2021, the U.S. continued to represent the largest market for Canadian firms acquiring abroad.

More than half of the industry categories profiled experienced a decline in activity relative to Q3 2021, with Precious Metals, Consumer Staples and Utilities each posting declines in excess of 20%. Conversely, Information Technology, Industrials and Real Estate were the most active sectors in Q3, representing 141 ($3.2B), 117 ($42.5B) and 110 ($15.8B) announced transactions, respectively. Real Estate comprised one-third of the 15 largest transactions in Q3 2021. The large increase in Precious Metals was driven by the $13.5 billion merger announcement between U.S.-based Agnico Eagle Mines Limited and Ontario-based Kirkland Lake Gold Ltd.


  • Deal activity in Q3 2021 continued to moderate relative to the preceding three quarters with 917 announced transactions, which represents a 9% decline from the all-time high observed in Q1 2021 and a 14% increase relative to the same quarter last year
  • Aggregate deal value reached $98B in Q3 2021, which is the fifth largest quarterly deal value in the past five years and represents a more than fivefold increase relative to Q3 2020
  • Cross-border M&A activity continued at a strong pace in the third quarter with 499 announced transactions collectively representing $79.8B (82% of the aggregate deal value).  There were 282 transactions representing Canadian firms acquiring foreign targets representing 57% of cross-border deals


  • There were 9 mega-deals (deals surpassing $1B in value) announced in Q3 2021. In aggregate, these transactions represented $74B of deal value and earmarked Q3 2021 as the fourth largest quarter for mega-deal value over the preceding five years
  • The largest transaction this quarter was Canadian Pacific’s bid of $39.7B for Kansas City Southern, followed up by Agnico Eagle Mines $13.5B announced merger with Kirkland Lake Gold 
  • Canadian Pacific’s bid for Kansas City Southern is the largest mega-deal over the past year and the fourth largest over the past five years

Industry Sector Activity

  • More than half of the industry sectors we track experienced a decline in announcements relative to Q2 2021, with Precious Metals, Consumer Staples and Utilities each posting declines in excess of 20%
  • Information Technology, Industrials and Real Estate were the most active sectors in Q3 2021, representing 141 ($3.2B), 117 ($42.5B) and 110 ($15.8B) announced transactions, respectively
  • Real Estate deals comprised one-third of the 15 largest announced transactions by deal value in Q3 2021

Breakdown by Transaction Size

  • Mid-market transactions with disclosed values (deal value below $250M) comprised 91% of the quarterly activity
  • Mega-deal activity (value over $1B) tapered relative to the prior quarter with 9 announcements, while aggregate deal value increased by 6% to $74B

Canadian Domiciled versus Foreign M&A Targets

  • Canadian firms made 700 acquisitions in Q3 2021, of which 418 were domestic deals (down 10% from the prior quarter) and 282 were acquisitions made abroad (down 4% quarter over quarter) 
  • Acquisitions involving Canadian targets moderated to 579 in Q3, which is a decline of 11% from Q2 and 15% from the Q1 high 
  • The deal value for transactions involving a Canadian target decreased to $30.4B in Q3, representing a decline of  $3.4B from the prior quarter

Cross-Border Deals

  • Cross-border deals represented 48% of total activity and 75% of total value in Q3 2021
  • Outbound cross-border activity decreased by 4% from the prior quarter, while inbound cross-border activity declined by 1%
  • Canada/U.S. transactions represented 62% of cross-border activity and 84% of cross-border deal value 

Deals by Provincial Domicile

  • Ontario remains the most active province by activity and deal value, representing 228 announced transactions and $22.6B in deal value, of which 3 were mega-deals 
  • British Columbia decreased their share of quarterly deal volume by 3% but more than doubled their share of deal value, reaching 13% in Q3 2021

Crosbie & Company Inc.
150 King Street West, 15th Floor, P.O. Box 95, Toronto, Ontario M5H 1J9
Tel: 416.362.7726 | Toll Free: 1-866-873-7002 | Fax: 416.362.3447


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