Trends in Foreign Direct Investment and Mergers and Acquisitions: International and Canadian Performance and Implications

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Recent foreign purchases of large Canadian companies have raised concerns that Canada is being “hollowed out.” However, an examination of recent mergers and acquisitions in Canada belies this image. High-profile megadeals are an exception in the long-term trend. Over the past 15 years, Canadian companies have been more active in acquiring foreign companies than have foreigners purchasing Canadian entities, even in the large-deal category of over $1 billion. Trends in Foreign Direct Investment and Mergers and Acquisitions: International and Canadian Performance and Implications predicts that mergers and acquisitions activity will slow down over the near term due to the high Canadian dollar and weaker profit growth in the United States. In the medium term, Canada will still have to face a structural challenge, since its investment position in the world has been declining over the past 26 years relative to that of other Organisation for Economic Co-operation and Development countries.

This report was produced by Signal49 Research’s International Trade and Investment Centre that examines the implications of global economic dynamics for Canadian business and governments leaders. More on the Centre’s research, events, and membership