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Canadian Companies Urged to Take Risks as Deal Activity Slumps

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M&A,Canada,Investment Banking

Investment bankers in Canada are calling on listed companies to increase mergers and acquisitions (M&A) activity and raise capital as deal volumes hit a 23-year low. Equity and equity-linked offerings in Canada have declined for three consecutive years, reaching their lowest point since 2001. While investors show appetite for growth-oriented companies, the scarcity of deals is attributed to a lack of risk-taking by Canadian businesses.

Ian de Verteuil, equity strategist at CIBC Capital Markets, discusses how Trump’s tariff threats could impact the 2025 market outlook.

The activity stands in sharp contrast to the US, where such offerings have climbed for the third straight year, data compiled by Bloomberg show. In a clean deal, banks are able to smoothly sell securities of a transaction they underwrote, whereas in a hung deal they may need to offer deeper discounts or risk being stuck with unsold inventory.

RBC and BMO have dominated the rankings for five straight years — one of the two banks have finished top of the table every year since 2019. This year, those two banks accounted for 34% of the total offerings.

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