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Resources Seen Spurring Canadian M&A in 2012:report

Cash-rich corporations and a stable economy will drive mergers and acquisitions in Canada in 2012, and lower commodity prices may spur opportunistic buying of resource companies, a top M&A expert at Canadian Imperial Bank of Commerce (CM.TO) said in a report on Tuesday, Reuters reported.

Access to cheap debt should also help spur dealmaking activity in the coming year, supporting increased private equity activity as well as corporate buying, the report said.

"Canada's strong relative economic performance, resource weighting, cash-rich balance sheets, and the strength of our dollar continue to be positives for Canadian M&A activity in 2012," Mike Boyd, managing director and head of M&A at CIBC World Markets, reportedly said.

Resource-related mergers and acquisitions were also key drivers in 2011, although average deal sizes retreated as the year progressed, Reuters cited the report as saying.

In a sign greater activity could be bubbling under the surface, Polish miner KGHM announced a roughly C$3 billion agreement last week to buy Toronto-listed copper miner Quadra FNX (QUX.TO), which controls one of the world's largest undeveloped copper projects, Reuters noted.

The CIBC report said deal sizes could pick up next year, especially if financial markets stabilize, it added.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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