By John Tilak
TORONTO, Oct 4 (Reuters) - Canadian mergers-and-acquisitionsactivity nearly doubled in the third quarter, fueled by deals inthe mining, real estate and cannabis sectors, according toThomson Reuters data released on Thursday.
Quarterly deal volume was up 91 percent to $75.7 billionfrom $39.6 billion in the same period last year, the datashowed, bucking a global trend of declines in Europe and Asia.
Mining transactions in the quarter included Barrick GoldCorp's planned $6.5 billion acquisition ofAfrica-focused miner Randgold Resources , as well asChina's Zijin Mining Group's C$1.86 billion ($1.45billion) deal to acquire Nevsun Resources. It was the strongest period for Canadian mining M&A sincethe second quarter of 2011. Mining deals slowed in recent years,due in part to commodity price pressures, balance sheet weaknessand investor pushback against miners seen as overpaying forassets.
The Barrick-Randgold deal, which had no premium and is beingpaid with equity, was well received.
"The structural issues facing the mining industry aren'tgoing away. But I do think the Barrick-Randgold transaction maybe the catalyst to trigger more consolidation in the goldspace," said Richard Tory, head of Canadian investment bankingand global head of metals and mining at Morgan Stanley. Theinvestment bank advised Barrick and Zijin on their mining deals.
Announced hostile deal activity picked up in the quarter,reaching a high since the end of 2016, according to data trackedby Kingsdale Advisors.
Highlights included Husky Energy's unsolicited, $5billion bid to acquire MEG Energy. In themining sector, Lundin Mining's hostile bid for Nevsunput the base metals miner in play, before Zijin agreed to afriendly deal.
"This represents the first real wave of hostile bid activitywe have seen since these rules were amended in 2016," said GeoffBarsky, head of Canadian and international M&A at BMO, which isadvising MEG.
Brookfield Asset Management's $11.4 billionagreement to acquire Forest City was the biggest dealin the quarter. Meanwhile, Constellation Brands Inc's $4billion investment in Canopy Growth highlighted theinterest in Canada's red-hot cannabis market.
"The multibillion-dollar transactions are the bestindicators of confidence levels in deal makers," said JohnEmanoilidis, co-head, M&A at Torys LLP, one of Brookfield'slegal advisers on the Forest City deal. "We're seeing a greatdeal of money competing for deals and some very robust auctionprocesses."
At least 17 deals were valued at more than a billion dollarsin the quarter, the data showed.
($1 = 1.2864 Canadian dollars)
(Reporting by John TilakEditing by Tom Brown)
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