Canadian M&A activity takes a holiday

Gary Park

Petroleum News Calgary correspondent

A dearth of billion-dollar offerings and sky-high asset values have knocked the bottom out of Canada’s merger and acquisition market after several years of unparalleled deal-making.

Toronto-based merchant bank Crosbie & Co. said the value of transactions in the first half plunged by two-thirds to C$5.21 billion from C$16.1 billion to the mid-point of 2002, although last year’s tally was heavily influenced by two blockbusters — the merger of PanCanadian Energy and Alberta Energy Company to create EnCana and Petro-Canada’s acquisition of the international assets of Germany’s Veba Oil & Gas.

So far this year, there has been only one major transaction — the C$1.07 billion paid by Canadian Oil Sands Trust for EnCana’s 10 percent stake in the Syncrude Canada oil sands consortium.

Enbridge logged the second largest transaction with its C$905 million creation of the Enbridge Income Fund that put some of the company’s pipeline assets in a trust, while ARC Energy Trust led.