There's a lot of buzz in the corporate industry when a company has been acquired by another. People are curious about what really happened, the companies who were involved, and what issues led to the company’s acquisition.
In this article, we’ll try to summarize some of the all-time largest acquisitions in Canadian history.
What are the all-time largest acquisitions in Canadian history?
Throughout Canada’s history, some of the all-time largest acquisitions involve different sectors – from communications, to energy, and even transportation. This does not come as a surprise since these sectors have the largest companies and corporations contributing to Canada’s economy.
Topping our list are the following takeovers or acquisitions involving Canadian companies:
- Rio Tinto (British-Australian) and Alcan: US$38 billion
- Vivendi SA (France) and Seagram Co Ltd: US$34 billion
- Canadian Pacific Railway and Kansas City Southern (US): US$31 billion
- Enbridge and Spectra Energy (US): US$28 billion
Interested to know how these acquisitions came about? Here are some of their deal’s important details, which may also be relevant if you’re looking at engaging in acquisitions (or being acquired).
1. Rio Tinto (British-Australian) and Alcan: US$38 billion
At the top of our list of all-time largest acquisitions in Canadian history is the amalgamation of two North American mining companies – Alcan with Rio Tino. Done in 2007, the deal was sealed when Rio Tinto Canada Holding Inc acquired the majority shares capital of Alcan Inc.
Seems like Alcan is a subject of numerous acquiring companies when Alcoa Corporation, an American counterpart of Alcan, also presented a ‘hostile bid’ for US$27.5 billion to acquire Alcan. At the end of the day, Rio Tinto triumphed with its ‘friendly bid’ of $38 billion, in addition to Alcan’s rejection of Alcoa’s bid offer.
Interestingly, Alcoa Corp is Alcan’s previous parent, being the unit of Alcoa in Canada in the past. The two parted ways in 1928 when a corporate spin-off occurred.
As a result of Rio Tinto’s acquisition of Alcan, the company called ‘Rio Tinto Alcan’ was born. Rio Tinto Alcan is currently headquartered in Montreal and is one of Canada’s leading mining companies that mines and produces aluminum, among others.
Interested to know about the typical process of a merger and acquisition (M&A)? Watch the video below, which will explain it from both the perspective of the buyer and the seller:
Read our article on Canadian laws on mergers and acquisitions for some background on the process.
2. Vivendi SA (France) and Seagram Co Ltd: US$34 billion
Next on this list is an acquisition between two entertainment companies. In 2000, the French media conglomerate Vivendi SA bought another entertainment giant in Canada, Seagram Co Ltd.
Starting off with its humble beginnings as an alcoholic beverage company in Ontario, Seagram eventually ventured into the entertainment industry. At some point, it acquired MCA Inc. whose assets included Universal Studios. Seagram also acquired other entertainment giants, such as PolyGram and Deutsche Grammophon.
However, after generations of being successful in their own game, Seagram’s financial woes eventually caught up. While many are skeptical of the results of the acquisition, Vivendi and Seagram finalized the deal in 2000 that created ‘Vivendi Universal SA’.
It would – at that time – be one of the largest media and entertainment companies worldwide, merging Seagram’s studios and Vivendi’s distribution system that includes the pay-television service of Canal+.
3. Canadian Pacific Railway and Kansas City Southern (US): US$31 billion
When we speak of M&A, we probably imagine it happening only in the corporate world or between capitalist businesses. However, the transportation sector also has its share on the list of all-time largest acquisitions in Canadian history.
The Canadian Pacific Railway’s planned purchase of Kansas City Southern started its negotiations in 2021 but was only completed in 2023. This, after hurdling numerous objections from competitors, including those lodged with the US’s Surface Transportation Board. Other entities were also interested in purchasing Kansas City Southern by presenting their respective bids.
The acquisition formed ‘Canadian Pacific Kansas City’ (CPKC) which now connects Canada, the US, and Mexico through a single-line railway. CPKC facilitates the flow of goods and products through a transportation system that is faster and can accommodate a higher volume of goods.
We can say that this case only proved that the huge economic benefits of an acquisition may outweigh opposition from rivals, subject to regulatory review.
4. Enbridge and Spectra Energy (US): US$28 billion
Last on this list of all-time largest acquisitions in Canadian history, but still considerably involving large amounts of interests and shares, is Enbridge’s acquisition of Houston-based Spectra Energy. Negotiations started in 2016 and the deal was completed in 2017 through an all-stock deal.
This acquisition resulted in Spectra Energy becoming officially defunct – a double-edged sword for investors and company owners. Enbridge continued to operate under its previous name.
Although the deal was completed at the time after oil and natural gas prices crashed in the past, it resulted in merging the two franchises on liquids and natural gas from the two countries. There was also minimal resistance from government regulators of the US and Canada.
Honourable Mentions
This list of all-time largest acquisitions in Canadian history would not be complete without some of our honourable mentions:
- Agrium and Potash Corp of Saskatchewan Inc: US$27 billion
- Rogers Communications and Shaw Communications: US$21 billion
- CNOOC Canada Holding Ltd and Nexen Inc.: US$19 billion
- Xstrata PLC (Switzerland) and Falconbridge Ltd: US$17 billion
- Cia Vale do Rio Doce SA (Brazil) and Inco Ltd: US$17 billion in 2006
- Suncor Energy Inc. and Petro-Canada: US$15 billion in 2009
If you want to go into an acquisition, consult with the best mergers and acquisitions lawyers in Canada as ranked by Lexpert.