In-Depth: Acquisition and Leveraged Finance - Edition 13 - Canada

David Nadler, Dan Dedic, Caroline Descours, Cathy Costa-Faria, Chris Baxter, Zhiyao Chen, Kyle Gerow, and Michael Hassar have co-authored the Canada Chapter in Lexology's In-Depth: Acquisition and Leveraged Finance - Edition 13. Special thanks to Keyvan Nassiry for his contributions to this chapter.

Leveraged lending is used by Canadian borrowers to fund a number of activities, including acquisitions, capital expenditures, dividend recapitalisations, refinancing of existing debt and ongoing operations. Following a gradual increase in 2024 and a multi-year high in 2025, acquisition activity opened on a firm footing in the first quarter of 2026, consistent with the levels seen in the last quarter of 2025, as a result of dealmakers acclimating to increased geopolitical uncertainties and conflict; however, it then noticeably decreased through the second quarter as a result of the conflict in the Middle East driving higher energy prices, inflation concerns and continued uncertainty around global trade policy. Consequently, Canadian acquisition activity in the second quarter of 2026 fell to its lowest quarterly level since the fourth quarter of 2023. As this decline reflects deal processes already in motion before the second quarter of data was released, it is difficult to gauge the full impact of external market forces on the remainder of 2026. Nevertheless, announced deal value rose significantly despite low transaction volume, underscoring the resilience of Canadian M&A activity amid ongoing external market pressures, including the continued uncertainty around US trade and tariff policy.

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