Crosbie & Company Canadian M&A Report – Q2 2026

Canadian M&A activity slowed in the second quarter of 2026, with 600 announced transactions, down 12% from Q1 and the lowest quarterly count since Q4 2023. Announced deal value moved sharply in the opposite direction, rising 51% to $114.5B as a record 23 mega-deals together accounted for $99.8B, or 87% of total announced value. Beneath the headline value, activity was noticeably slower, with value from transactions below $1B declining for a second consecutive quarter from $21.5B in Q4 2025 to $18.3B in Q1 and $14.7B in Q2.

Market conditions in Q2 were unusually noisy as the conflict in the Middle East drove higher energy prices and renewed inflation concerns, while uncertainty around trade policy persisted. Given transaction timelines, much of the Q2 announcement data reflects processes that were already underway before these events, making the full impact difficult to assess. The M&A market became more selective, particularly at the smaller end, with greater scrutiny on earnings quality, cyclicality and other business-specific risks. At the same time, financing conditions remained supportive, allowing buyers with strategic conviction and balance-sheet capacity to continue pursuing large M&A transactions.

“Macro uncertainty can make sellers hesitate to test the market, but we are definitely not seeing much impact on high-quality businesses,” said Sadat Mirza, Managing Director at Crosbie. “In situations with strong rationale, buyers are eager to build conviction and act decisively to get deals done. Ironically, this environment can work in favour of high-quality sellers – with fewer deals in the market, they are attracting more attention and stronger competition from buyers.”

There were 23 mega-deals announced in the quarter, totalling $99.8B and representing the highest quarterly count on record. Strategic buyers remained active and willing to deploy significant capital where transactions offered scale and portfolio fit, with Energy, Utilities and Real Estate leading the way. The AI infrastructure theme evident in Q1 also broadened, as accelerating data-centre investment continued to drive demand for power generation and supporting infrastructure. Shell’s $22.6B acquisition of Calgary-based ARC Resources was the quarter’s largest transaction, strengthening its Montney position and feed gas supply for LNG Canada, while TransAlta’s $1.4B Colorado gas-generation acquisition was linked in part to funding its growing data-centre development pipeline.

The mid-market remained the backbone of Canadian M&A by transaction count, with deals below $250M representing 80% of transactions with disclosed values. Activity was clearly softer, however, with count declining to 173 from 229 in Q1 and aggregate value falling to $4.3B from $6.8B. Mixed domestic economic conditions, including higher fuel costs and softer demand, weighed on many businesses and impacted seller appetite to transact. While mid-market volumes have yet to match the recovery in mega-deal activity, key ingredients for broader activity remain in place, including significant capital and strategic buyer appetite.

Industrials and Information Technology remained the most active sectors, with 126 and 83 announced transactions. Deal count increased in Industrials (+13), Health Care (+12), Financial Services (+9) and Consumer Staples (+4), while the largest declines were in Information Technology (-29), Metals and Mining (-22) and Materials (-20). Energy, Utilities and Real Estate generated the largest aggregate values at $32.1B, $20.5B and $16.3B, respectively, with Precious Metals contributing a further $15.9B. Information Technology, Q1’s largest sector by value at $15.6B, fell to $1.3B. The sharp decline in value primarily reflects the absence of large technology transactions: three Q1 deals exceeded $1B, led by Ecolab’s $6.5B purchase of CoolIT Systems and Equinix’s $5.5B acquisition of atNorth, while no Q2 technology M&A deals cleared the $1B mark.

Cross-border M&A represented 294 transactions, or 49% of deal count and 54% of aggregate value. Canadian targets drew $79.9B across 406 transactions, nearly double the $41.1B in Q1, even as deal count fell from 457. Notably, foreign buyers acquired 138 Canadian targets, up modestly from 132 in Q1 despite the decline in overall market activity. Inbound value rose to $41.9B, although this was heavily influenced by Shell’s acquisition of ARC Resources. Canada-U.S. transactions remained the largest cross-border corridor, accounting for 57% of cross-border count and 45% of value. The relative resilience of inbound activity is notable given the broader decline in transaction count and points to continued international appetite for Canadian businesses.

Overview 

• Transaction volume fell to 600 announcements, a 12% QoQ decline and the thinnest quarter since Q4 2023
• Announced value ran the other way, climbing 51% to $114.5B on record mega-deal activity, one of the largest quarterly totals of the past decade
• Canadian targets numbered 406 against 457 in Q1, yet drew $79.9B, close to twice the $41.1B of three months earlier

Mega-Deals 

• A record 23 transactions cleared the $1B mark, together worth $99.8B, or 87 cents of every dollar announced
• Leading the field was Shell’s $22.6B purchase of ARC Resources, ahead of a $9.4B take-private of First Capital REIT by KingSett Capital and Choice Properties, and Equinox Gold’s $8.5B tie-up with Orla Mining
• Energy carried the heaviest share at $30.6B across three deals, trailed by Utilities at $18.2B and Real Estate at $15.2B
• Industrials topped the count at 126, with Information Technology second at 83
• Industrials (+13), Health Care (+12), Financial Services (+9) and Consumer Staples (+4) all gained ground on Q1
• Information Technology recorded the largest decline at -29, ahead of Metals and Mining (-22) and Materials (-20)
• Energy led on value at $32.1B, with Utilities and Real Estate at $20.5B and $16.3B

Industry Sector Activity

• Industrials topped the count at 126, with Information Technology second at 83
• Industrials (+13), Health Care (+12), Financial Services (+9) and Consumer Staples (+4) all gained ground on Q1
• Information Technology recorded the largest decline at -29, ahead of Metals and Mining (-22) and Materials (-20)
• Energy led on value at $32.1B, with Utilities and Real Estate at $20.5B and $16.3B

Breakdown by Transaction Size

•  Deals under $250M made up 80% of those disclosing a price, six points off the 86% share held in Q1
• That works out to 173 transactions carrying $4.3B of value, against 229 last quarter

Canadian Domiciled versus Foreign M&A Targets

• Canadian targets attracted 406 bids, 51 fewer than in Q1, though the dollars behind them nearly doubled to $79.9B
• The split ran 268 to domestic purchasers and 138 to foreign ones
• Foreign buyers accounted for roughly a third of the count but more than half the value, a reversal traceable largely to Shell / ARC Resources
• Outbound appetite held up, with 156 foreign businesses bought by Canadian acquirers

Cross-Border Deals

•  Deals crossing the border made up 49% of volume and 54% of dollars, the value share easing from 64% three months earlier
• The U.S. corridor still dominates, though its grip loosened to 57% of cross-border deals and 45% of cross-border dollars

Deals by Provincial Domicile

• Ontario hosted the most targets at 144
• Alberta claimed the value crown at $30.9B, almost entirely on the back of ARC Resources
• British Columbia logged 79 deals worth $12.0B, with Quebec close behind at 62 worth $10.5B