Matt Barasch, CFAChief Canadian Equity Strategist

RBC Capital Markets

TODAY’S MERGERS & ACQUISITIONS ENVIRONMENT

• Background

• Drivers

• Headwinds

TODAY’S MERGERS & ACQUISITIONS ENVIRONMENT

Background

Source: Bloomberg, RBC Capital Markets

$0

$50

$100

$150

$200

$250

$300

$350 Canadian M&A (in bns)

Resource Blip

Change to ICA

Drivers

• Low Growth

• Competitive pressures

• Access to capital

• Currency

• One-off factors

Drivers

Source: Haver Analytics, RBC Capital Markets

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Q3-09 Q3-10 Q3-11 Q3-12 Q3-13 Q3-14 Q3-15

Canada GDP (quarterly y-o-y)

Source: Haver Analytics, RBC Capital Markets

$0

$10

$20

$30

$40

$50

$60

Canadian Secondary Equity Offerings (in bns)

Source: Haver Analytics, RBC Capital Markets

$0.60

$0.65

$0.70

$0.75

$0.80

$0.85

$0.90

$0.95

$1.00

$1.05

$1.10

2000 2002 2004 2006 2008 2010 2012 2014 2016

USD per CAD

• Low Growth

• Competitive pressures

• Access to capital

• Currency

• One-off factors

Drivers

Headwinds

• Investment Canada Act

• Various National Acts: Telecom, Broadcasting, Utilities, et al

• Lack of opportunities in hot sectors

• Access to capital

Headwinds

Source: Bloomberg, RBC Capital Markets

0%

5%

10%

15%

20%

25%

30%

35%

40%

Staples Tech Financials Energy Telco

Sector Breakdown U.S. M&A 2015($2.5 TN in deals)