Photo: Graham Hughes The canadian Press
The president of Airbus, Tom Enders, in front of a device for Bombardier CSeries. The aircraft manufacturer quebec has ceded control of this range of devices the French company in 2018.
Mergers and acquisitions, especially when a quebec-based company passes in the hands of a company established outside the province of Quebec, continued to hold the attention in the economic news, and the year 2018 was not the exception to the rule.
If the name of the actors involved exchange, the last 12 months are registered in the movement of continuity the past few years, according to the professor in the Department of management at HEC Montreal Louis Hebert, who specializes in mergers and acquisitions. “There has been no breach. There is more available capital at a low cost. This is not what I want to buy, but what I can buy. “
In a context where the price of the transactions is constantly rising, Mr. Hébert believes that the next year could mark the beginning of a transition in the event of, in particular, a tightening of the conditions for borrowing.
Currently, the sellers know that the buyers were strong enough to untie the purse strings, he observed. “This is a situation that is very rich in terms of transactions. However, is it going to continue for a very long time if there is a credit crunch or fears of a recession ? “
In the meantime, here is a feedback on a few major transactions, and on what to keep the eye in the course of the next year.
After you have set foot in the australian market in 2014, Saputo expanded its presence in this country of Oceania extending 1.3 billion to buy Murray Goulburn. This allows the multinational company in quebec to become the largest milk producer of the country Oceania. “It is for this reason that I spoke of continuity, was recalled by Mr. Hébert, referring to the growth strategy of the company. What we have seen is that the strategies of the companies in terms of expansion have been stable. “
However, to achieve its purposes, the company has had to calm fears of regulatory authorities in the australian agreeing to divest itself of a large industrial plant which was operated by Murray Goulburn.
Acquisitions have always been at the heart of the strategy of the Stingray in order to ensure its growth. But the supplier québécois music service hits a big shot on may 2 by conducting an intrusion in the area of traditional radio by swallowing Newfoundland Capital to half a billion dollars.
This transaction, the largest in the history of Stingray, and allows him to become one of the most important canadian broadcasters, thanks to the 101 licences — 82 on the FM band, and 19 on the AM band — owned company established in Nova Scotia. The Council of broadcasting and telecommunications commission gives its green light to the acquisition in October.
After Petrolia last year, it is the turn of the other major oil company in québec, Junex, together with an alberta company, this time after the offer filed by Cuda Energy. This Calgary company, which carries out the exploration and exploitation of oil and natural gas, is not foreign to Quebec since it already holds exploration licences in the valley of the St. Lawrence river.
The transaction is confirmed in August, but the previous weeks were hectic, as another company, Utica Resources, led by Mario Lévesque, presents two unsolicited bids to try to swallow the Company, whose main shareholder is the québec government. However, this is the offer of Cuda which is accepted.
The name of Camso was little known before that Michelin buys the québec-based manufacturer of tyres — specialized in, among others, tracks for snowmobiles and agricultural machinery — for 1.7 billion US$. But after having multiplied the acquisitions in order to enhance its growth since its founding in 1982, the company decides to spend in the bosom of the French giant, which will develop a new group of products for off-road, which will be led from Quebec.
Camso has about 7500 employees in 26 countries, operates 22 factories and generates annual sales of 976 million and a profit of $ 68 million.
As is often the case with foreign takeovers, Michelin takes a series of commitments, including the maintenance of the decision-making centre of the new division in Magog, at the head office of Camso, in addition to the 300 jobs that are there. The research and development activities, which provide work for approximately 125 persons, will also remain in Quebec.
Bombardier and Air Canada
Bombardier has not done that cede control of the CSeries aircraft in 2018. The weight loss programme continued in November, following another restructuring resulting in the elimination of 5,000 positions, of which 2500 in Quebec, as well as a sale of assets. The company sells the program turboprops Q400 to Viking Air for approximately US $300 million, as well as its training activities for technicians and drivers for its business aircraft at CAE for approximately $ 645 million.
However, this is the third wave of layoffs in scope made by Bombardier since 2015 who sows the grumbling in the population, primarily due to the significant blows of thumb to financial assistance granted by the governments to the company.
After an initial bid in July, Air Canada finalize an agreement, on 26 November, to acquire the loyalty program Aeroplan, owned by Aimia, for $ 450 million. The approximately five million members who have accumulated points over the years following this issue closely since the air carrier account to deploy its own customer loyalty program as of 2020.
Before you buy, Aeroplan, Air Canada had announced in may 2017, of its intention to sever its links with the loyalty program in order to deploy its own platform. The transaction will have to get the green light from shareholders of Aimia on 8 January. Originally, Aeroplan was the custom loyalty program of Air Canada. It was spun off as an independent company in 2005.
To monitor 2019
It was not only the transactions that were announced that hold the attention, given that some companies have made decisions or reported intentions, which could lead to transactions as early as 2019. Here are some companies to watch.
The distributor of automotive parts has revamped its senior management last September, but has also formed a committee to investigate its strategic options — which opens the door to a sale of the company. If the company has provided no timetable regarding when a decision might be taken, some analysts have referred to the scenario of a sale of the entire company, certain parties, such as FinishMaster, or a major restructuring.
Uni-Select founded in 1968 by 12 businessmen in quebec.
After the CSeries and Q400, there is reason to wonder if Bombardier will remain present in the sector of commercial aircraft. The company now evaluates the strategic options of the RTA, these regional jets that can carry up to 90 passengers and which are assembled by nearly 1,000 workers at Mirabel, in the Laurentians.
According to the president and chief executive officer of Bombardier, Alain Bellemare, the airlines appreciate these devices, but the company wants to reduce the expenses related to this program, among other things, through negotiations with suppliers.
Many expected that the law passed by Ottawa, making possible the conclusion of agreements for the repair will enable SNC-Lavalin to turn the page on the criminal charges that weigh on it since 2015. However, federal prosecutors have caused surprise by refusing, for the moment, to negotiate with SNC-Lavalin, who must now resign themselves to attempt to prove his innocence before the courts. The agreements of repair generally provide for the payment of a fine and a series of conditions to be met in exchange for an abandonment of the judicial proceedings.
The royal Canadian mounted police has laid charges of fraud and corruption to the place of SNC-Lavalin and certain of its subsidiaries for actions that would have been posed by Libya. The multinational company, who says that he has nothing to hide, has pleaded not guilty, but a long court battle seems to be taking shape in front of the courts.
Some analysts have since referred several scenarios, such as a sale of assets as a unit of construction and engineering, a collapse of the share capital of the company, and even a complete withdrawal from the canadian market.