In his report Mergers and acquisitions in Canada in 2025, PwC Management Services LP indicates that, despite ongoing productivity challenges in Canada and political uncertainties stemming from the new U.S. administration, the firm remains cautiously optimistic about merger and acquisition (M&A) activity, reporting an uptick in recent deals.
Between July 1 and November 30, 2024, 1,068 transactions were concluded across all sectors in Canada, with a total value of $227 billion. “In the first half of 2025, we expect the Canadian M&A markets to continue this slightly upward trajectory, with a steady increase in activity as the year progresses. », specifies PwC. “The increase in activity between July and November 2024 reflects a gradual recovery rather than a rapid increase, as ongoing concerns about the productivity crisis continue to slow the industry. »
The uncertainties associated with possible radical changes in U.S. policies exacerbate these challenges. If some companies are considering establishing a presence in the United States to preserve market share, this instability could dampen transactions as companies re-evaluate their risk management strategies.
Multiple challenges
Despite these obstacles, PwC sees a unique opportunity for market participants to help solve productivity problems. Among the report’s recommendations, the development of targeted acquisition strategies is put forward to directly respond to the problems identified.
The document highlights four areas for improvement to increase productivity: “Develop acquisition strategies that avoid the trap of assuming that progression in the sector of activity in question is linear,” insists PwC. “Continuously conduct market analyzes regarding emerging technologies. » The company also encourages businesses to continually assess labor supply in key occupations and adjust their scale to stay current with technological advancements.
-Exploiting technological potential
Looking across sectors, PwC highlights that financial services stand out in their use of technology to transform their operations. “With a strong appetite for growth through inorganic strategies, this sector is actively acquiring technology companies to optimize operations, reduce costs and improve customer experience. »
“As in previous years, the financial services sector in Canada remains very active in terms of mergers and acquisitions. We are seeing significant volume (and often transactions of considerable size) driven, in many cases, by the desire to transform through an external growth strategy. »
PwC adds that private equity is expected to play a key role in solving productivity challenges. By consolidating small businesses, these funds make it possible to achieve critical mass and support technological investments.
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