Legal news and trends for Canadian in-house counsel and c-suite executives
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By comparison, a PwC report in October noted that M&A activity in Saskatchewan was 23-per-cent higher in 2011 than in 2010. It is home to uranium, potash, and farmland, which is considered to be among the least expensive in the developed world. Expectations are that deals in the resource sector will continue to domi- nate the M&A landscape, but it should be no surprise that the food, beverage, and agri-business sector — a relatively unassuming but critical market to the world's economy — has been evolving towards a global industry with huge potential for big business in the coming years, especially so in emerging mar- kets as the world's food supply becomes a larger focus. In developing markets such as China and India, population increases and rising incomes are the reasons for their ever-increasing num- ber of consumers buying branded pack- aged foods. Food has always been big business here at home. According to the Conference Board of Canada, the food sector rep- resents more than nine per cent of the country's gross domestic product and 13 per cent of all employment in Canada. It is also the second largest employer in the manufacturing sector. While uncertainty coming from the r When it Appeals Opinions and Risk Management Mergers & Acquisitions Claims against Professionals and Fiduciaries Directors' and Officers' Duties and Liabilities Class Actions eally matters. European debt crisis remains the biggest potential damper on the year for M&A activity, the credit crisis has taught com- panies over the last few years to hang on to cash and, overall, heading into 2012 Canadian companies have stronger bal- ance sheets than they did two years ago. All of which means they can afford to be opportunistic in their pursuits. Experts point to a lot of itchy fingers holding on to private equity cash waiting for the right deal. That is definitely the case in the food industry. Law firms and other business service sectors have been watching the food industry closely for the last few years. Blake Cassels & Graydon LLP formed its food, beverage, and agri-business practice group in 2009 because it was "seeing a lot of deals getting done," says Michael Stevenson, a partner in Blakes' M&A and food, beverage, and agri- business practice groups. Stevenson says most of the parties in the deals done prior to 2009 were represented by regional law firms and the potential for national and inter- national opportunities was identified. "Obviously, food and agri-business is Toronto: 416 867 3076 London: 519 672 4510 www.lerners.ca a large part of the Canadian economy. One of the things we have been look- ing at is that there were 36 deals done in this sector in Canada in 2009, which was a drop from a high of 56 in 2008, but it was up to 45 in 2010 so the numbers are climbing back up after the economic downturn", says Stevenson. "As a firm we are seeing transactions in this space and we expect to see a lot more in 2012." David Woollcombe, a partner in the business law group with McCarthy Tétrault LLP, says the U.S. food market Lerners-1/2_IH_Aug_11.indd 1 20 • FEBRUARY 2012 INHOUSE 8/16/11 8:42:12 AM