Canada Outbound Cross Border M&A up 47%

This week's $2.8 billion bid by Valeant Pharmaceuticals for Medicis Pharmaceutical Corp and Onex Corp's $813 million acquisition of SGS International brings the volume of Canada outbound cross-border M&A activity to $47.3 billion for year-to-date 2012, a 47% increase compared to last year at this time and the strongest period for Canada outbound M&A since 2007 when announced volume totaled $66.7 billion.

Energy and power target activity, up 72% compared to a year ago, accounts for 31% of overall Canada outbound merger activity this year. Media and entertainment and real estate account for 17% and 10%, respectively. Targets based in the United States account for 47% of overall activity compared to 40% during 2011, followed by the United Kingdom (14%) and Australia (9%).

Real Estate M&A down 18% from 2011

Realty Income Corp's $1.9 billion acquisition of American Realty Capital Trust brings the volume of worldwide real estate M&A to $132.4 billion so far this year, down 18% from year-to-date 2011. Bank of America Merrill Lynch, an advisor to Realty Income Corp, leads the year-to-date standings for real estate M&A with $22.2 billion in deals, up from 17th last year at this time. Barclays ranks second with $17.7 billion from 10 deals.

European real estate M&A totals $34.8 billion for year-to-date 2012, an increase of 12% compared to a year ago, while activity in the United States totals $46.7 billion, down 17% compared to last year at this time. Non-residential real estate merger activity accounts for 50% of this year's total, up 17% compared to 2011, while merger activity in the REIT sector has fallen 30% compared to last year.

Strong Labor Day Week for US-Dollar Corporate Debt

Bolstered by multi-billion dollar corporate debt offerings from WellPoint Inc, General Electric Capital and Brazil's Vale SA, the volume of US-dollar denominated investment grade corporate debt totaled $28.8 billion for the week, marking the second largest Labor Day week since records began in 1980.

Year-to-date, US-dollar denominated investment grade corporate debt totals $650.3 billion, an increase of 17% compared to last year at this time. JP Morgan leads the underwriter rankings with 13.8% market share, down from 15.1% a year ago. Citi ranks second, up one spot from last year at this time, with 11.7% share. Issuers in the financials, energy and power and consumer staples sectors account for two-thirds of activity this year.

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Thomson Reuters
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