The Canadian FS M&A Newsletter provides a market update and summary of key trends from the insurance, asset & wealth management, and banking sectors.
The first quarter of 2020 has been an extraordinary period with the onset of the COVID-19 pandemic, disrupting economic activity across the world. M&A activity across North America, including Canada, has all but halted during March. Exceptions are only for transactions that were well progressed, where diligence was already substantially completed and negotiations of legal contracts already close to final. The COVID-19 pandemic was certainly a key driver to the 32 percent decline observed in Global deal volume in Q1 2020.
Canadian Financial Services M&A deal volume increased in Q1 2020 to the highest level since Q1 2018. Consistent with previous quarters, transaction activity was led by the insurance brokerage sub-sector which comprised 15 of the 36 transactions. The impact of COVID-19 in the period was limited by the fact that public health measures were not fully rolled out until mid-March and well progressed transactions continued to close in late March. Our expectation is that the full impact of the lockdown will be seen in Q2 2020 as very few transactions proceed to closing and for a time thereafter as sale processes are being delayed.
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