As 2025 begins, what can we expect in Canadian M&A in the
year ahead?
The second half of 2024 saw a resurgence in M&A in Canada, a
welcome development after the depressed deal volumes of 2023. There
are conflicting signals regarding the road forward, but with cause
for optimism overall.
On a positive note, numerous encouraging market trends have
continued building, including: (1) the Bank of Canada's steady
and significant interest rate cuts since June 2024, (2) a narrowing
of valuation gaps between buyers and sellers, (3) ample cash on
hand for both corporate and private equity (PE) buyers, and (4) an
increasingly robust financing market. On the other hand, factors
threatening downward pressure on Canadian M&A in 2025 include
(1) continued global geopolitical tension and conflict, (2) public
policy uncertainties both north and south of the border, and (3)
heightened risk of regional and international trade wars.
