Canadian market will likely see IPOs rather than M&A activity

The “big players” of Canada’s insurance market will likely take the IPO (initial public offering) route to expansion rather than the merger and acquisition route, said Jack Lee, vice president of BFL Canada.
Lee was asked by a person attending the Property Casualty Underwriters Club luncheon in Toronto on May 20 if he anticipated a flurry of mergers and acquisitions activity in the Canadian marketplace.
“I can only expect that there will be some m&a,” Lee said. “We have too much capacity and not everybody is going to rebound as well as others.”
But, he continued, “an acquiring company isn’t going to overpay to help someone else out. What you may see for some of the larger companies having problems [is that] when they’re not going to sell at a distress price, they may go the IPO route.”
AIG, once it sells off “all of its pieces, will go this route and they will put out an IPO and become very fluid after that,” he said.
“You may see minor m&a, but for the big ones you may see some independent investment coming.”