Canada’s M&A activity grows as US market slows, Sapling reports
Sapling Financial Consultants has released its October 2025 Green Shoots M&A Index, highlighting divergent merger and acquisition (M&A) activity between Canada and the United States.
Canadian growth
According to the report, Canada's M&A market is showing moderate growth, while activity in the US is slowing down. In Canada, the Green Shoots M&A Index reached 'Sprout' status with a score of 49 out of 100, marking a 6.6 per cent rise from September. The number of Canadian M&A deals recorded in September 2025 was 229, with forecasts pointing to 244 deals in October 2025.
Key drivers for Canada's M&A activity include large-scale transactions in the infrastructure and energy sectors. Institutional and strategic investors are increasingly targeting long-term assets, contributing to the sustained value of deals. The report also notes that technology firms are favouring going-private transactions and strategic exits, especially within the mid-market segment, which has helped maintain steady momentum in overall deal flow.
US contraction
In the United States, the Green Shoots M&A Index score fell to 34 out of 100, reflecting 'Wilt' status. This represents a 3.7 per cent decrease compared to September's score. The US recorded 1,433 M&A deals in September, with the forecast for October set at 1,390 deals.
The slowdown in US M&A activity is attributed to a broader risk-off environment. The report details that both buyers and financiers in the US are taking a more cautious approach as they await greater clarity regarding valuations and interest rates. Despite the overall contraction, certain sectors remain active, such as acquisitions in AI-driven technology, which attract both technology firms and private equity buyers. Other sectors seeing continued interest include consumer products, telecommunications, infrastructure, and manufacturing. These are supported by consolidation trends, expansion into 5G technologies, and a renewed emphasis on semiconductors and supply chain resilience.
Cross-border dynamics
"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 & 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."
The report stresses that while domestic M&A activity is diverging, cross-border transactions between the US and Canada remain an area of relative strength. However, these are not without challenges. Ongoing trade tensions and tariffs are cited as introducing added risks, particularly in industries such as energy, automotive, and manufacturing. Sapling highlights that both strategic and private equity buyers are intent on navigating these challenges by prioritising deals that enable them to adapt supply chains or secure access to essential assets in the North American region.
Domestic influences
The Green Shoots M&A Index is compiled using a mixture of historical deal data and an array of macroeconomic indicators to provide forecasts on deal activity. Notably, the Canadian index factors in trends from the US market, reflecting the considerable interconnectedness between the two countries' economies. This approach, according to Sapling, helps provide early indications of domestic deal momentum in Canada, which is a key consideration for market participants given the degree of cross-border corporate and investment activity.
While each country's M&A landscape reflects its own economic conditions and investor sentiment, the forecasted trends underscore the importance of sector-specific drivers and the ongoing influence of macroeconomic factors such as interest rates and trade policy on the broader M&A environment in North America.
