Is the Mergers & Acquisitions Market Right for You?

Canada’s mergers and acquisitions (M&A) market are chock full of incredible opportunities, opening doors to avenues that allow for growth, profitability and change. The terms are often used interchangeably, but the distinction is important to make.

Understanding what M&As are

Acquisitions, as the name suggests, are when larger businesses acquire, and thus absorb the smaller company. Technically, the smaller company ceases to exist, but on an organizational level, change isn’t always straightforward. Stocks are no longer traded by the company that has been absorbed.

Mergers, on the other hand, are often a joint partnership between two or more companies that operate at a similar scale. When this occurs, both companies’ individual stocks are frozen, but a new joint-stock is issued for the merged entity.

Acquisitions are often seen as hostile takeovers because they can be quite unfriendly and one-sided. Larger corporations with buying power, economies of scale and market share tend to buy out their competition. This jeopardizes a lot of smaller businesses and ends up being an unfair trade for the many stakeholders, including investors and employees.

Are M&As right for your business?

There’s a lot to consider when you’re considering venturing into this market, including the nature of your own business.

It can be difficult to make the kind of organizational changes both pre- and post-acquisition, managing taxes and sales, especially cross-border or international tax strategies and a lot of other logistical issues.

They require critical insight, market analysis, a cost-benefit evaluation and understanding all the potential outcomes and changes. It’s crucial to have a complete understanding of the legal, tax-related, financial and organizational implications of your decision.


Some of the benefits that M&As offer to businesses include:

Major tax advantages

This is especially applicable to cross-border mergers and acquisitions, where a lot of countries offer tax rebates, reductions and cuts for setting up businesses locally. The major advantage this gives to your business is reduced spending on taxation, and greater spending on the business itself.

New markets to explore

Typically, M&As offer businesses new territories to explore. If you’re acquiring a business, you tend to acquire their customer base and niche as well. For businesses merging together, there’s reduced competition and greater consolidation. As a single entity, you gain a larger market share directly or indirectly. This also means great financial growth and opportunity, with more room to make profits.

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Pooling resources is cost-effective.

Another major advantage of these partnerships or sales/purchases is that you can pool together or take advantage of both your resources. From being able to merge workforces and office spaces to set up factories, workshops, outlets, is all greatly reduced and streamlined.

If you feel like your business stands to benefit from M&A, Faber LLP is at your service. You can hire our full-service CPA firm in Edmonton for our M&A services, including tax strategies, transaction structuring and reorganizing. Reach out to us for our tax consultancy services and more.