Canadian businesses inked more “megadeals” last year, even as geopolitical tensions and economic uncertainty slowed the overall pace of dealmaking.

That’s according to a new report calling for a more active year in 2026, thanks in part to the federal government.

New York-based financial advisory firm Kroll’s latest Canadian M&A report found that while the deal count for 2025 fell versus 2024, disclosed valuations hit their highest level in a decade.

According to the report, 1,405 Canadian companies transacted in 2025, down 8.4 per cent from 2024. At the same time, total implied enterprise value soared 38.1 per cent year-over-year to $122.2 billion. Kroll says while “megadeals” accounted for only seven per cent of all transactions last year, they represented 85 per cent of the total disclosed deal value. 

“Geopolitical conflicts and macroeconomic uncertainty over 2025 have increased the cautiousness and selectiveness of buyers, though there is clear willingness to transact for high-quality assets,” the researchers wrote. 

The report says the largest Canadian transaction in 2025 was a deal to acquire Nord Anglia Education led by a consortium of investors including the Canada Pension Plan Investment Board.

The second-largest deal involving Canadian parties was the acquisition of French renewable energy firm Neoen by Brookfield (BN.TO), Brookfield Renewable Partners (BEP-UN.TO), and a financial firm based in Singapore.

Parkland’s acquisition by Sunoco was the third-largest deal.

Kroll says several additional “megadeals” were announced in 2025, but have yet to close. These include Anglo American’s bid (AAL.L) for Teck Resources (TECK-B.TO). There’s also the deal to acquire Calgary-based Nova Chemicals led by Austria’s Borouge Group, and the purchase of Convex Group by Onex (ONEX.TO) and American International Group (AIG). (This deal closed on Feb. 6.)

According to Kroll, the median 30-day takeover premium of public companies in 2025 was 37 per cent, up one percentage point on an annualized basis.

Private company transactions dominated the deal landscape, accounting for 91 per cent of M&A activity, down from 94 per cent in 2025. Meanwhile, the number of public companies sold in Canada rose to 125, from 92 in 2024.

‘Encouraging tailwinds’ for 2026

Looking ahead to 2026, Kroll’s M&A team sees Canada’s federal government helping to “mitigate a dynamic relationship between Canada and the U.S.” Prime Minister Mark Carney’s government is attempting to double non-U.S. exports within a decade.

So far this year, Carney has secured a new strategic trade partnership with China, and resumed previously stalled negotiations with India. At the recent World Economic Forum in Davos, he proposed an ambitious fusion of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and European Union trade blocs.

Kroll says the United States accounted for 60 per cent of the deals to acquire Canadian companies in 2025. At the same time, Canadian acquirers favoured the U.S., which accounted for 59 per cent of foreign deals. 

“The Canadian M&A market has encouraging tailwinds going into 2026. Strategic buyers and financial sponsors have shown a clear willingness to engage in M&A through 2025,” the researchers wrote in their report. “As they begin to adapt to this new ‘normal,’ we are likely to see more buyers come off the sidelines.”

Last December, PwC Canada called for the federal government to play a key role in spurring the pace of M&A deals in 2026.

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on X @jefflagerquist.