2024 M&A Boom: Implications for 2025
2024 was a year of resurgence in M&A deal activity after several years of pandemic disruptions. Partner and co-head of Torys’ M&A practice, Michael Amm, discussed the factors contributing to this resurgence and what it means for 2025.
“In 2021, there were 105 deals with Canadian public targets, totaling $95 billion, making it one of the biggest years by transaction value in the last decade,” Michael explained. However, the following two years saw a significant drop in deal values to just $39 billion in 2022 and $22 billion in 2023.
Contrastingly, 2024 has seen a strong growth with 93 deals already reaching a value of $62 billion. This uptick is a positive sign that M&A activity is bouncing back. However, there are complexities to consider, such as increased scrutiny around foreign investment.
Michael highlighted that there is increased vigilance, especially affecting buyers from China and Russia. Critical minerals, essential for industries like electric vehicle battery production, have been under intense scrutiny with strict investment screening by Canada and other Western countries.
Navigating through assertive regulatory and legal environments is becoming more challenging across industries, making deals harder to execute. Shareholder activism has also intensified post-pandemic, leading boards to focus on sustainable transactions. This increased discipline among boards and management teams is a positive development for the industry.
Looking forward to 2025, Michael mentioned a potential shift in Canada’s M&A activity under a new administration, indicating possible tariffs and trade policy changes. Despite this, he remains optimistic about M&A activity in 2025, foreseeing good conditions for its continued growth.
In conclusion, there are positive indicators for the M&A space moving forward, but it’s essential to stay informed and vigilant about potential changes on the horizon.
