Rising interest rates and tightened credit market conditions in the wake of the Silicon Valley Bank and Signature Bank collapses in the US have seen Canadian mergers and acquisitions (M&A) fall to a four-year low.
Canadian M&A volumes fell to $34.7 billion in the first quarter, down 52.3% from a year ago, according to a Reuters report.
Dealmaking is off to its worst start since the same period in 2020, the publication said.
Corporate debt, meanwhile, fell to 8.9% year-over-year to C$17.1 billion in the first quarter, the lowest first quarter since 2020, Reuters reported.
But the second quarter appears to already be off to a stronger start for dealmaking, particularly in the mining sector.
This week, Teck Resources rejected a $22.5 billion merger offer from Glencore. This comes after Lundin Mining acquired a majority stake in the Caserones copper mine located in Chile for about $950 million in late March.
"We expect the second half of the year really to be where stability hopefully comes back or some kind of certainty with respect to path forward comes back and what that we expect M&A to return," PwC national deals markets and value creation leader Sean Rowe told Reuters.
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