Toronto: Miners, especially of base metals, will drive Canadian merger and acquisition activity for the rest of 2011, although oil and gas and financial services will also be significant, bankers said on Tuesday.

In a panel discussion at the Reuters Global Mergers and Acquisitions Summit, investment bankers said deal volumes had a long way to grow, and the average size of larger deals would be around the $1 billion (Dh3.67 billion) mark, or double last year's level.

Canada has seen a slew of multi-billion dollar deals since the start of the year. Two Toronto-listed miners are facing unsolicited takeover bids.

Key sectors

"Clearly energy and mining, I think, are going to be the two key sectors in Canada over the next several years," said Peter Buzzi, co-head of mergers and acquisitions at the Royal Bank of Canada, Canada's largest bank.

Buzzi and chief investment bankers from the Bank of Montreal, Bank of Nova Scotia and Canadian Imperial Bank of Commerce, said Canadian mergers and acquisitions activity would be healthy given strong corporate balance sheets and improved access to credit markets.

"If you look at Mergers and acquisitions volumes last year either globally or in Canada, they are still only at about half where we were at the peak, so there's still a fair bit to go," said Michael Boyd, head of mergers and acquisitions at CIBC.

Unsolicited bid

Three major merger scenarios are unfolding in Canada: an unsolicited bid by base metals miner Equinox to buy Lundin Mining for $4.7 billion, another unsolicited bid by China's Minmetals Resources to buy Equinox for C$6.3 billion (Dh24 billion), and a C$3 billion friendly bid from the London Stock Exchange to buy the TMX Group, Canada's largest stock market operator.

Asked which Canadian sector would get the most attention, Mergers and acquisitions bankers pointed unequivocally at mining, with a heavy emphasis on base metals, and the gold sector quick on its heels.

"The one other sector that we haven't really talked about which has been quite active and continues to be just for inbound and outbound Mergers and acquisitions, is financial services frankly," said Andre Hidi, who leads mergers and acquisitions for BMO Capital Markets, the investment banking arm of Bank of Montreal.