Canada’s mergers and acquisitions (M&A) landscape is experiencing a notable shift as the prevalence of megadeals—transactions exceeding $5 billion—signals a robust market outlook for 2026. This trend underscores a strategic emphasis on scale and consolidation, particularly within key sectors such as mining, technology and artificial intelligence (AI), defense, and energy.
In 2025, the Canadian M&A market witnessed a decline in deal volume; however, the total disclosed implied enterprise value reached $122.2 billion, marking a 38.1% increase from the previous year. Notably, megadeals accounted for only 7% of all transactions but represented 85% of the total disclosed deal value. This indicates a market increasingly driven by high-value transactions, reflecting a strategic focus on acquiring substantial assets to enhance competitive positioning. ([kroll.com](https://www.kroll.com/en/publications/m-and-a/canadian-ma-industry-insights-winter-2026?utm_source=openai))
Despite the surge in megadeals, domestic mid-market transactions remain the cornerstone of Canada’s M&A activity. In 2025, 86% of all deals were valued below CAD $25 million, highlighting the sustained strength of the mid-market segment. This trend is expected to continue, with local deals accounting for half of all M&A activity in Canada, serving as a stabilizing force amid the prominence of larger transactions. ([nortonrosefulbright.com](https://www.nortonrosefulbright.com/en-ca/knowledge/publications/62be9ae3/what-does-2026-have-in-store-for-m-and-a-in-canada?utm_source=openai))
The mining sector has been particularly active, with global mining transactions valued above US$500 million rising approximately 45% in 2025 compared to the previous year. This surge reflects a strategic shift towards consolidation, as companies prioritize scale over the uncertainties associated with greenfield development. ([mexicobusiness.news](https://mexicobusiness.news/mining/news/mining-ma-drives-canadas-deal-market-decade-high?utm_source=openai))
In the technology and AI sectors, significant investments are driving M&A activity. Canada’s commitment to sovereign AI has led to over $2.9 billion in federal investments announced between 2024 and 2025, fueling efforts across the AI technology stack to enhance digital independence. This investment is creating a surge in M&A activity and joint ventures as companies seek to acquire new capabilities and build defense readiness. ([pwc.com](https://www.pwc.com/ca/en/media/release/pwc-2026-canadian-m-and-a-outlook.html?utm_source=openai))
The defense industry is also poised for substantial growth, with more than $1 trillion projected to flow into Canada’s defense sector over the next decade, including $81 billion allocated in the 2025 federal budget. This significant investment is setting the stage for M&A as Canadian companies look to acquire new capabilities and build defense readiness, increasingly with a focus on European markets with comparable NATO capabilities. ([pwc.com](https://www.pwc.com/ca/en/services/deals/trends.html?utm_source=openai))
In the energy sector, strategic M&A activity is evident, with the sector accounting for nearly 30% of Canadian M&A in the first half of 2025, generating $24.2 billion in value across 18 deals. This trend suggests that acquirers are prioritizing scale and diversification, with a particular focus on renewable energy assets. ([ainvest.com](https://www.ainvest.com/news/strategic-activity-canadian-energy-sector-bids-withdrawals-valuation-opportunities-2510/?utm_source=openai))
Looking ahead, the Canadian M&A market is expected to maintain its momentum, driven by strategic investments in key sectors and a balanced mix of megadeals and mid-market transactions. This dynamic environment reflects a market that is not only resilient but also strategically focused on value creation and innovation.