Year in Review 2016: Biggest Canadian business deals of the year

·Editor
Biggest deals of the year
[Not that kind of deal, Scott]

2016 marks a banner year for mergers and acquisitions in Canada. By March 31, there had already been a record $83 billion in deals done with companies in this country.

Some deals this year saw multiple buyers team up for jaw-dropping purchases, like Brookfield and Australian firm Qube taking over Asciano for about $9 billion.

Other deals were so head-scratching and surprising that they made headlines before successfully closing. Amaya’s founder is attempting to take the company private once again in a $6.7 billion deal. Repeated attempts have been made to purchase U.S. Steel Canada, without success so far. CP Rail took a shot at merging with Norfolk Southern earlier this year, only to have all bids rejected.

The list is a long one this year.

But the deals that did go through have been massive ones, involving some of the biggest companies in Canada. Here’s a look at the top 10 biggest deals for 2016 — not necessarily the highest dollar value — but the ones that have had (or will have) the biggest impact on the country.

<i>[A St-Hubert restaurant is seen in Montreal Thursday, March 31, 2016. The Quebec-based St-Hubert restaurant business has agreed to be acquired by the owner of the Swiss Chalet chain for $537 million. In addition to 117 restaurants, Cara Operations Ltd. will acquire two food manufacturing plants, two distribution centres and a real estate portfolio. THE CANADIAN PRESS/Peter McCabe]</i>
[A St-Hubert restaurant is seen in Montreal Thursday, March 31, 2016. THE CANADIAN PRESS/Peter McCabe]

10. Swiss Chalet owner buys St. Hubert for $537 million

It may not have been the biggest in terms of dollar value, but for emotional impact, this may have been the most significant for many Canadians. Cara Operations Ltd. purchased the Quebec-based rotisserie chicken restaurant chain in March, fueling a war between chicken loyalists over who had the superior sauce (perhaps not an all-out war, but there were definitely sides taken). To the joy of chicken enthusiasts everywhere, the 45-year-old St. Hubert continues to operate as it did throughout Quebec and New Brunswick.

<i>[Blackcomb mountain ski patrollers Dominic Balik and Nicole Koshure inspect the snow on Blackcomb Mountain in Whistler, B.C., early morning Friday, December, 21, 2012. Whistler Blackcomb Holdings, the owner of one of Canada's biggest and most popular ski resorts, is being sold to Colorado-based Vail Resorts under a friendly deal the two companies announced Monday. THE CANADIAN PRESS/Jonathan Hayward]</i>
[Blackcomb mountain ski patrollers Dominic Balik and Nicole Koshure inspect the snow on Blackcomb Mountain in Whistler, B.C., early morning Friday, December, 21, 2012. THE CANADIAN PRESS/Jonathan Hayward]

9. Whistler Blackcomb sold to U.S. company for $1.4 billion

When this national landmark sold to a U.S. company, many Canadians reacted with shock and dismay. But there’s no question that Colorado-based Vail Resorts Inc. is an expert in the field. With nine mountain resorts and two ski areas in the United States and Australia, Vail Resorts has played a major role in some of the biggest snow destinations the world. And now you can add Whistler Blackcomb to its list. The resort is the most visited ski destination in North America and is expected to be particularly popular with the increasing ski vacation tourists coming from China.

“We have felt for a long time that Whistler (Blackcomb) is really the best-positioned North American resort to benefit from the growth that we expect in outbound Chinese ski visitation, especially as China starts to ramp up towards the 2022 Beijing Winter Olympics,” said Vail CEO Rob Katz when the deal was announced in August.

8. Shaw Communications buys Wind Mobile for $1.6 billion

Shaw took on Canadian communication rivals head-on this year by finalizing its purchase of Wind Mobile in July. Now in direct competition with the wireless services offered by Rogers, Bell and Telus in Canada, Shaw rebranded Wind in November to Freedom Mobile, and launched LTE service to some of its customers.

With its internet and cable television customers down, the acquisition of the telecom company came at a very key time for Shaw. In its last quarter, Shaw saw profits rise 13 per cent, despite losing nearly 9,000 internet accounts and 27,000 retail television accounts, thanks in large part to its new growing wireless division.

7. Rona purchased by U.S.-based Lowe’s for $3.2 billion

The government approved the takeover of Canadian home improvement retailer Rona by U.S.-based Lowe’s in May, clearing the way for the $3.2 billion acquisition. Lowe’s Canada reported low earnings in 2016 and pointed to the Rona acquisition as an explanation, but expects to see 10 per cent overall growth (including 4 per cent growth from Rona) by February 2017. Minister of Innovation, Science and Economic Development Navdeep Bains called foreign investment in companies like Rona “an important driver of innovative, economic growth and development in the Canadian economy.”

6. CIBC buys Private Bancorp for $3.8 billion

In an effort to expand its reach south of the border, something most of the Canadian Big Five banks are looking to do, Canadian Imperial Bank of Commerce offered $3.8 billion in a cash-and-stock deal for the Chicago-based lender. With a presence in 11 U.S. markets, the September deal helped CIBC to get a substantial foothold in the United States. The deal will actually dilute CIBC’s 2016 earnings, but the increased exposure promises to help CIBC compete with its other Big Five rivals in the long run.

5. Suncor acquires Canadian Oil Sands for $4.2 billion

Months before the TransCanada deal came into the public eye, another blockbuster energy deal took place in the form of Suncor Energy Inc. purchasing rival Canadian Oil Sands in a $4.2 billion deal in January. The two companies had previously been at odds as partners in a mining and upgrading project with Syndacrude Canada Ltd., but with the new deal, Suncor owns close to 37 per cent of that project.

It might not all be rosy going forward for Suncor, however; earlier in November, megastar investor Warren Buffett sold his stake in the energy giant. When Berkshire Hathaway purchased the stock in 2013, and later boosted the number of holdings in Suncor in 2015, it was seen as a huge vote of confidence for the company. Now, with OPEC remaining unpredictable, pipeline approval hitting a standstill and the long-term demand for oil on the decline, even with Canadian Oil Sands in its fold, Suncor may not be able to weather the coming storm.

4. Fortis acquires ITC Holdings for $11.3 billion

The St. John’s-based electric and gas company made the biggest purchase in its history this year, closing a deal for Michigan-based ITC Holdings Corp. in October. The deal helps the company, which listed on the NYSE for the first time this year, expand into the renewable energy and natural gas industries. While the company saw its profits drop this past quarter due to the acquisition, as one of the 15 largest utility companies in North America, it has room for exceptional growth in the coming years.

<i>[Activists carry signs and petition boxes as they march to the State Department for a rally to protest against the Keystone XL pipeline March 7, 2014 in Washington, DC. (Photo by Alex Wong/Getty Images)]</i>
[Activists carry signs and petition boxes as they march to the State Department for a rally to protest against the Keystone XL pipeline March 7, 2014 in Washington, DC. (Photo by Alex Wong/Getty Images)]

3. TransCanada buys Columbia Pipeline Group for $13 billion

The rejection of the Keystone XL pipeline by U.S. President Obama was a huge blow to TransCanada, but in July the Calgary-based company purchased Columbia Pipeline Group, adding 24,000 km of pipeline to its existing network. In September, TransCanada offered another $848M to purchase the remaining equity in Columbia Pipeline Partners LP that it didn’t already own.

In order to help cover the cost of the Columbia purchase (and Columbia’s $2.8 billion in debt), TransCanada sold off two U.S. power plants in November, although TransCanada representatives say they expect to take a $1.1 billion loss on their sale.

2. Potash Corp and Agrium merge, creating $36 billion company

As the fertilizer industry continues to struggle, with prices down about 80 per cent over the last eight years, two industry titans united in September to create a massive agricultural force. When the merger is finalized, the company will be the top exporter of potash and the second-most prominent producer of nitrogen fertilizer.

Farmers were resistant to the merger, as they feared it would lead to higher costs due to a lack of competition within the industry. When the deal is finalized, the company will control about two-thirds of the potash capacity in North America, according to CBC.

1. Enbridge buys Spectra Energy in $37 billion deal

The biggest deal of the year, when it comes to straight dollar value, is the purchasing of Houston-based Spectra Energy Corp. by Calgary-based Enbridge. According to The Globe and Mail, the transaction in September was one of the largest-ever Canadian takeovers, resulting in the creation of North America’s largest infrastructure company, with assets in both oil transportation and natural gas.

The all-stock transaction valued Spectra Energy at $37 billion, but also saw Enbridge take on Spectra’s $22 billion in debt.