Overall deals in the U.S. remained five times higher than in Canada, with 1,390 deals expected this month, compared to 1,433 deals recorded in September. North of the border, activity has strengthened moderately to an expected 244 in October from 229 a month prior.
The index forecasts the number of deals, but not their value.
“Our October index shows a mixed picture, as Canada’s M&A market continues to strengthen, the U.S. is experiencing a faster-than-normal decline in deal activity,” said Rob Hong, co-founder and CEO of Sapling Financial Consultants.
“Despite these contrasts, cross-border M&A between the U.S. and Canada remains active, but trade tensions and tariffs have introduced new risks, especially in energy, automotive and manufacturing sectors. Strategic and private equity buyers continue to pursue cross-border deals in infrastructure, energy and mid-market technology to manage tariffs, secure supply chains and adapt to evolving trade rules.”
In an email, Stefan Mioc, Sapling’s senior engagement manager, noted that U.S. acquirers remain the most active foreign buyers of Canadian assets, including in the infrastructure, technology, industrials and wealth management sectors.
The relative strength of the U.S. dollar, strategic interest in Canadian natural resources and infrastructure, and the Bank of Canada’s interest rate cuts are all fuelling activity, he said. In addition, private equity firms’ search for stable, cash-generative assets is helping to drive deals.
In general, institutional and strategic investors targeting long-term assets are driving some of the larger-scale transactions in the infrastructure and energy sectors in Canada. Sapling also noted that more tech firms are going private and engaging in strategic exits, adding deal flow in the mid-market space.
The top deal driver in the U.S. is AI, with tech firms and private equity buyers scooping up automation, data analytics and digital infrastructure platforms. Consumer products, telecommunications, infrastructure and manufacturing are also seeing increased activity, in part due to 5G expansion and renewed interest in semiconductors and supply chain resilience.
Sapling said its Green Shoots M&A Index forecasts activity based on a combination of historical deal data and macroeconomic and market indicators. The Canadian numbers incorporate U.S. trends, reflecting the strong correlation between North American markets and providing early signals of domestic M&A momentum.