By Lucy Saddleton, Managing Editor
About this three-part webinar series:
In the first installment of The Legal Innovation Forum’s three-part Capital Markets Webinar Series in March 2025, we brought together thought leaders and innovators from both sides of the border to explore the evolving North American market of mergers and acquisitions in an era of political instability, rising interest rates and cost of capital, and the new tariff and trade playbook.
Our attendees heard about the future outlook for global dealflow and gained critical insights into the evolving regulatory state, and an understanding of the most active sectors for deals in 2025.
This panel featured David Felicissimo, general counsel at Valsoft Corporation; Nigel Rughani, VP, corporate development at Vertex; Christine Kim, associate at Clifford Chance; John Clifford, partner at McMillan; and Marshall Eidinger, partner at Bennett Jones; together with our moderator, Andrew Bowyer, founder and CEO at ADB Insights.
This three-part blog series captures the highlights of the discussion in bite-sized blog posts with corresponding video clips.
In association with
THE US REGULATORY LANDSCAPE
The second part of this panel recap is focused on the evolving regulatory environment and its impact on the dealmaking landscape. Our panelists agreed that the current regulatory environment adds another layer of uncertainty to the M&A landscape, but also presents opportunities for strategic acquisitions and partnerships.
The US is undergoing significant regulatory changes, creating hesitation among dealmakers. Christine Kim, an associate at Clifford Chance, commented that US analysts and dealmakers are “following flags that have been put in the sand for a number of years” that are not expected to change in the current US presidential administration, making it easier to shape M&A transactions in more sensitive industries. However, she warned that nothing is certain so it’s a good idea to expect the unexpected.
“It puts dealmakers in a really tough spot,” said Kim. “You have to roll up your sleeves and speak to your advisors and take a really hard look at your long stop dates in your transaction agreements. Take a look at how you’re allocating regulatory risk if you’ve got a US player in your transaction,” she advised.
THE CANADIAN REGULATORY LANDSCAPE
Our speakers moved on to discuss the landscape north of the border, where the Commissioner of Competition has demonstrated a willingness to aggressively challenge big deals that have an adverse impact on competition. Moreover, under the Investment Canada Act, very large deals can be reviewed, and a national security review is routinely applied to sectors such as critical minerals and critical technologies.
When the first round of tariffs was announced, Canada’s Minister of Innovation, Science and Industry announced an additional factor that would be considered in a national security review of any transaction – economic security.
“It’s very unique,” said John Clifford, a Toronto-based partner at McMillan. “The focus is whether the proposed investment can undermine Canada’s economic security through the enhanced integration of the Canadian business with the economy of a foreign state.” This is a way to avoid the thresholds that are otherwise needed to apply for a review, Clifford explained, and to protect Canadian businesses from declining valuations which could make them susceptible to opportunistic or predatory investment behavior by foreign investors.
OPPORTUNITIES AMID UNCERTAINTY
Our speakers also discussed the impact of interest rates on M&A activity, with higher rates leading to more divestitures and opportunistic acquisitions of troubled assets.
In the US, tax compliance enterprise software company, Vertex, is approaching the regulatory landscape from the standpoint of being observant and taking advantage of opportunities amid uncertainty.
“I think we’re seeing interest rates play a role in some of the uncertainty, which is keeping the sponsor community on the sidelines from doing deals,” said Nigel Rughani, VP, corporate development at Vertex. “We actually view that as a net positive for strategics like us that can be more proactive in doing deals.” Vertex expects to continue being active in acquisitions.
David Felicissimo, general counsel at Montreal-based Valsoft Corp. commented that the scope for regulatory matters has broadened, especially in Europe, creating additional challenges for investors.
“They’ve extended the scope of what falls under regulatory and what doesn’t,” said Felicissimo, noting that acquisitions for governmental software are now susceptible to regulations.
“We’ve seen a protectionist approach, especially in the US, which has expanded into Europe as well, so anytime there’s a foreign buyer in our last three-to-four deals in Europe last year, it was a sign and close, just because we had to wait to get approvals, and that’s something we haven’t seen in the past.”
Watch this section of the panel discussion here now: Time stamps: 23:20 – 34:20