Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
Issue link: https://digital.carswellmedia.com/i/1544329
6 www.lexpert.ca Feature and operations and conserving capital amid uncertainty. By 2021 and 2022, greater liquidity, low interest rates, and government stimulus fuelled activity, particularly among financial sponsors. More recently, however, private equity has operated in a more selective envi- ronment. "On the mid-market side, it's been a little more challenging," he says, with some sponsors prioritizing exits and fundraising cycles. Larger global finan- cial players remain active, particularly in larger-scale transactions, he notes, even as Canadian volumes remain below those seen in the US and Europe. Commodity cycles and geopolitics continue to shape decisions. See notes that elevated gold prices and demand for critical minerals have supported mining transactions, while oil and gas consolida- tion reflects valuation considerations and strategic objectives. Kristopher Hanc, co-head of the corpo- rate department at Bennett Jones LLP and co-head of the firm's capital markets practice, says 2025 was a record-setting year for Canadian M&A by value. Total announced and completed deal value reached approximately $390 billion, surpassing the previous high-water mark set in 2021. "The story for last year is that the value of Canadian M&A transactions surged in 2025," Hanc says. "It was driven primarily by large-cap deals in infrastructure and resources." While overall deal count declined modestly – from 3,408 announced transac- tions in 2024 to 3,184 in 2025 – aggregate value rose sharply, underscoring the domi- nance of mega-deals. Inbound investment was a significant contributor. Hanc points to 16 inbound transactions valued at US$1 billion or more in 2025, compared with 12 the previous year. "About half of that is resources and infrastructure," he says, highlighting sustained global demand for Canadian hard assets amid rela- tively stable interest rates and strong commodity pricing. Looking ahead, Hanc describes the 2026 outlook as "positive, but nuanced," reflecting what he calls "measured confi- dence in M&A in Canada." He expects large transactions to remain a defining feature, particularly in energy and mining. "The two largest deals by value as of late February are in energy. The third and fourth are in mining," he notes. "We're seeing that trend continue." Tariffs and geopolitical volatility shaped much of the Canadian M&A market in 2025, says Faran Umar-Khitab, co-leader of Gowling WLG's corporate commer- cial, funds, and private M&A practice in Canada. However, he sees renewed confi- dence building for 2026. "In our view, 2025 was a lot softer than most people anticipated – and the answer to that is tariffs, tariffs, tariffs," Umar- Khitab says. "From March onwards, deals already in the pipeline got done, but anything earlier was often put on hold, especially in directly affected sectors." Activity slowed markedly between April and September before rebounding toward year-end. "By the back end of the year, as the market gained some certainty, we saw transactions pick up again – particularly in businesses delivering real value." Resilience proved critical. "We saw bigger deals get done. Even smaller deals that closed were businesses able to withstand turmoil and uncertainty." He reports increased engagement from financial advisors. "We're getting calls every day from investment banks – including Silicon Valley banks in Toronto – looking for opportunities," he says, adding that "there's a lot of optimism that this year will be better than last." Certain sectors dominate discussions: crit- ical minerals, supply chain resiliency, energy security and transition, and AI. At the same time, foreign investment review has become central to deal strategies. "We're seeing FDI (foreign direct investment) approvals come up much earlier in transactions," he says, noting heightened scrutiny around cross- border ownership and data exposure. "The real value of experienced M&A counsel comes in being solution- oriented, helping solve problems rather than just identifying them" Jennifer Grossklaus, DAVIES WARD PHILLIPS & VINEBERG LLP "We're getting calls every day from investment banks looking for opportunities. There's a lot of optimism that this year will be better than last" Faran Umar-Khitab, GOWLING WLG