Ontario, Quebec losing market share in mergers

Share

Investment banking was once largely the preserve of folks in shiny towers in Toronto and Montreal.

Now, Calgary is probably the most heavily bankered city in the country, and firms are branching out and bankers are showing up in smaller centres across Canada. There are offices in towns like Saskatoon (MGI Securities) and Winnipeg (CIBC World Markets.) A report looking at merger activity by province helps to explain why.

The PricewaterhouseCoopers report shows that while companies in Ontario and Quebec once represented two-thirds of the merger and acquisitions activity in Canada, when looking at where the target is based, the two provinces are now down to about half. Ontario dropped from 47 per cent to 31 per cent in the past decade, and Quebec slipped from 29 per cent to 22 per cent.

Much of that market share went to Alberta. But most areas of Canada gained.

While M&A share in Manitoba is down, Winnipeg is once again seen as a "gateway to the west," for large financial firms looking for business. Saskatchewan is busier because it has uranium, potash and farm land that are coveted, the report says. The Atlantic provinces are also increasingly popular.

However, nobody will be abandoning Toronto any time soon. While Ontario has lost some market share on the sell side, it has boomed on the buy side. Buyers from Ontario make up 70 per cent of acquisitions with a Canadian buyer this year, according to PWC.

Here's a look M&A at market share by province of the company being sold, comparing 2011 and 2000. The analysis is by dollar value of deals.

• Alberta: Up from 17.1 per cent to 25.7 per cent.

• British Columbia: up from 5 per cent to 16 per cent.

• Manitoba: Down from 1.5 per cent to 1.1 per cent

• Ontario: Down from 47 per cent to 31.4 per cent

• Quebec: Down from 29.1 per cent to 22 per cent

• Saskatchewan: up from 0.1 per cent to 2 per cent Atlantic provinces: up from 0.1 per cent to 1.2 per cent