Mergers and acquisitions activity in British Columbia remains in a state of fitful growth, marked by a number of offsetting market forces and uneven levels of activity. This stands in sharp contrast to the lofty expectations held at the start of the year, when the stage appeared set for a significant resurgence in M&A, driven by a confluence of favourable market conditions, including a stabilization in inflation, lower interest rates, narrowing valuation gaps between buyers and sellers, significant and growing dry powder among private investor groups, and an expected wave of succession-driven sales by entrepreneur-founders. But so far this year, these forces have been meaningfully offset by unexpected headwinds, including adverse and unpredictable trade policy and increasing geopolitical uncertainty.

While market turbulence has sidelined many transactions — particularly those facing valuation uncertainty due to potential tariff exposure — dealmakers have adjusted to pursue emerging opportunities in this new context. This has included a focus on domestic transactions, supported in part by a withdrawal of U.S. private equity investors that has prompted greater engagement by Canadian PE groups, and increased investment by Canadian pension funds and other domestic public investor groups. There also has been greater interest in sectors with limited trade exposure or that represent growth opportunities, including technology and artificial intelligence, energy and infrastructure, mining and critical minerals, health care and financial services.

Companies and investors are also adopting several mitigation strategies to navigate the current trade environment. These include defensive investments to reconfigure supply chains or reduce the impact of tariffs, as well as a focus on businesses with strong domestic sales, service-based business models or sufficient........

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