A comparative review of M&A deal terms in Canada and the U.S.
Canada and the United States have developed one of the most significant and dependent investment relationships in the world. Since the U.S. has historically been, and continues to be, Canada's largest foreign investor, the prevailing M&A deal terms in this country have been heavily influenced by transaction activity, jurisprudence and trends in the U.S. That is not to suggest, however, that M&A practices in North America have converged into a single standard, because disparities do exist between market terms for acquisitions of both private and public target companies on both sides of the border. That fact was reinforced by our recent review and comparison of deal point studies published by the American Bar Association; the results of which are summarized in the charts that follow.
For purposes of the private target portion of this bulletin, we contrasted the results published in the ABA's 2013 US Private Target Mergers & Acquisitions Deal Points Study, which reported on transactions completed in 2012, with the results of the ABA's most recent (2012) Canadian Private Target Mergers & Acquisitions Deal Points Study, which reported on transactions completed in 2010 and 2011.
The statistics on public target acquisitions contained in this bulletin were gleaned from a comparison of the results of the 2013 Canadian Public Target Mergers & Acquisitions Deal Points Study, which reported on transactions over C$100 million announced in 2011 and 2012, with the results of the ABA's US 2013 Strategic Buyer/Public Target Mergers & Acquisitions Deal Points Study for transactions announced in 2012.
Acquisitions of Private Targets:
Acquisitions of Public Targets:
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
