Crosbie & Company M&A Report – Q3 2026

Canadian M&A announcements declined for a second consecutive quarter in Q3 2026, falling by 31 deals or 5% to 569, the lowest count since Q4 2023. Announced value fell by $44.0B or 38% to $71.5B, its lowest level since Q1 2025.

Both deal count and value increased across every disclosed transaction-size category of $1B or less. The decline in aggregate announced value of $44.0B was entirely accounted for by mega-deals (defined as transactions above $1B) whose value fell $47.1B. The mid-market proved the more resilient part of the market, with disclosed transactions of $250M or less rising by 10 deals or 6% to 183, with their combined value increasing by $1.7B or 39% to $6.0B. More broadly, transactions of $1B or less increased by $3.1B or 21% to $17.8B.

The quarter’s operating environment became less predictable as it progressed. The Bank of Canada’s business surveys showed improving sales expectations early in Q3, followed by weaker export and investment outlooks after Canada-U.S. trade talks broke down in August. Renewed tariffs also added to cost pressures, with businesses unable to pass through all of the increases to customers. Trade uncertainty and technological disruption are also increasing scrutiny of revenue forecasts, pipeline conversion and the sustainability of margins.

“The divergence between headline activity and mid-market deal-flow underlines the importance of looking beyond the largest deals when assessing conditions for private business owners,” said Sadat Mirza, Managing Director at Crosbie. “We are also seeing more owners consider taking some liquidity while remaining materially invested in the next stage of their business’s growth. That is broadening sale conversations to include partnerships that better reflect how much capital, control and continuing involvement an owner wants.”

The retreat in mega-deals drove the decline in overall value: 15 transactions above $1B generated $53.7B, down from $100.9B across 23 transactions in Q2. Their share of announced value fell from 87% to 75%. Real Estate, Energy and Utilities accounted for 85% of mega-deal value in Q3, up from 65% in Q2. Brookfield’s $9.9B Aypa Power acquisition and the $7.2B Caruna Networks transaction extended the power-infrastructure theme highlighted in Q2 into storage and electricity networks, while the $7.1B LXP Industrial Trust transaction reflected investment in industrial property. Aypa’s operating and under-construction portfolio is 95% contracted, with an average remaining contract life of 17 years, illustrating the power of revenue visibility in investment commitments of this scale.

Industrials and Information Technology remained the most active sectors, with 99 and 86 announcements, respectively, but their results diverged. Industrials recorded 27 fewer transactions than in Q2, while Information Technology increased by three. Financial Services (+9), Energy (+5) and Health Care (+3) also gained ground, partly offsetting declines in Industrials, Precious Metals and Materials. Real Estate led announced value at $23.8B, followed by Utilities at $17.6B and Energy at $13.4B. The $7.1B LXP transaction accounted for most of the increase in Real Estate value, despite an unchanged sector deal count.

Cross-border M&A accounted for 287 transactions worth $42.6B, representing 50% of announcements and 60% of value. Count declined 2%, while value fell 32%. Canadian acquisitions abroad increased 6% to 165, with value rising 40% to $29.0B, largely reflecting the $7.1B LXP acquisition. Foreign acquisitions of Canadian targets fell 12% to 122 and 68% by value to $13.6B. The value comparison reflects Q2’s $22.6B Shell–ARC transaction, which accounted for 80% of the inbound value decline. Foreign buyers still represented 34% of Canadian-target announcements, broadly unchanged from Q2, while Canadian-target count overall fell 11% to 363. Canada-U.S. transactions remained the largest corridor, at 57% of cross-border count and 75% of value.

Overview

• Aggregate value fell 38% to $71.5B, entirely explained by mega-deals (above $1B); value in transactions of $1B or less rose 21% to $17.8B
• While total announcements declined 5% to 569, disclosed transactions of $1B or less rose from 192 to 205 while mega-deals (above $1B) fell from 23 to 15
• The net decline in deal count came from undisclosed-value deals, which fell 9% from 385 to 349; deals with disclosed values increased, rising from 215 to 220

Mega-Deals

• Mega-deal count fell from 23 in Q2 to 15, matching Q1; value fell 47% to $53.7B, fully explaining the decline in overall value
• Aypa Power ($9.9B), Caruna Networks ($7.2B) and LXP Industrial Trust ($7.1B) together represented 45% of mega-deal value
• Real Estate, Utilities and Energy contributed 85% of mega-deal value, up from 65% in Q2, with power infrastructure and industrial property featuring prominently

Industry Sector Activity

• Industrials led with 99 announcements, down 21%; Information Technology followed with 86, up 4%
• Financial Services (+9) and Health Care (+3) increased for a second consecutive quarter; Energy added five announcements
• Industrials (-27), Precious Metals (-13) and Materials (-7) recorded the largest count declines, partly offset by gains elsewhere
• Real Estate led value at $23.8B, followed by Utilities at $17.6B and Energy at $13.4B

Breakdown by Transaction Size

• Deal count and value rose in every disclosed size category of $1B or less; however mega-deal count (above $1B) declined from 23 to 15 and value down 47%
• Mid-market transactions of $250M or less rose 6% to 183 and 39% by value to $6.0B, lifting their share of disclosed deals to 83% from 80%

Canadian Domiciled versus Foreign M&A Targets

• Canadian-target count fell 11% to 363 and value declined 63% to $29.9B; increased activity involving foreign targets partly offset the count decline
• Domestic buyers acquired 241 Canadian targets, down 10%; foreign buyers acquired 122, down 12%
• Foreign buyers represented 34% of Canadian-target count, broadly unchanged from Q2 and above 29% in Q1 and 26% in Q4 2025
• Canadian buyers announced 165 acquisitions abroad, up 6% from Q2 and broadly in line with 167 in Q3 2025

Cross-Border Deals

• Cross-border deals remained near half of all Canadian announcements at 50%, versus 49% in Q2 and 47% in Q1; they accounted for 60% of Q3 value
• Canadian acquisitions of U.S. targets increased from 89 to 99, while U.S. acquisitions of Canadian targets declined from 80 to 65
• Of all Canadian cross-border activity, Canada-U.S. transactions remained the largest corridor, representing 57% of cross-border count and 75% of value

Deals by Provincial Domicile

• Ontario led with 142 announcements and $18.7B of value; count was broadly unchanged from 144 in Q2
• Alberta’s $8.1B of value was in line with Q1, following Q2’s $30.9B total including Shell’s ARC Resources acquisition
• British Columbia recorded 81 deals worth $0.7B; Quebec’s 35 deals worth $0.8B marked the largest provincial count decline, from 62 in Q2