Tara Lachapelle is a Bloomberg Gadfly columnist covering deals. She previously wrote an M&A column for Bloomberg News.

Even if Donald Trump wanted to seal off Canada with a great, big wall -- as he says he would do with Mexico -- he probably couldn't stop all these mergers. 

American companies have devoted more dollars to Canadian acquisition targets this quarter than they have since mid-2014 (which was when Burger King and Tim Horton's struck their $13 billion merger). On Wednesday morning, U.S. medicine distributor McKesson added to this year's activity with a $2.2 billion takeover of Rexall Health, Canada's No. 2 drug-store chain. That's after Lowe's, the home-improvement retailer, agreed last month to acquire Quebec's Rona for about $2 billion.

Loonie for the Loonie
American companies are taking advantage of the strong U.S. dollar to buy Canadian rivals.
Source: Bloomberg

A big driver for these latest transactions is the depreciation in the Canadian dollar. In January, the loonie fell to a 13-year low against the U.S dollar, amid the sharp decline in the price of oil -- Canada's largest export -- and its central bank's decision to keep interest rates unchanged. All-cash deals represent about 85 percent of the volume, and they include those by McKesson and Lowe's. 

Continued Weakness
The Canadian dollar has rebounded some but not much, as oil remains below $35 a barrel.
Source: Bloomberg

Now to reverse directions, Canada-to-U.S. deals have also been on the rise, including record volume in the final quarter of 2015, based on announced transactions. That was mostly due to Canadian Pacific's $38 billion bid (including debt) for Norfolk Southern, which the U.S. railroad has rejected. Canadian Pacific has said it's prepared to end the effort should Norfolk Southern continue to resist a merger, but hasn't yet so it counts toward the tally. Even if it does walk away,  Canadian Pacific probably won't give up that easily on a U.S. deal as it seeks to create a transcontinental service. The Wall Street Journal reported Tuesday that Canadian Pacific recently approached CSX, another American railroad company valued at $24 billion, as a backup plan.

Coming to America
Despite its currency's relative weakness, Canada is stepping up acquisitions in the U.S. as its major railroad and utility both look to consolidate their industries.
Source: Bloomberg
Fourth quarter of 2015 includes Canadian Pacific's mega-merger offer for Norfolk Southern, which is unlikely to get done.

Also last quarter, Canada Pension Plan Investment Board and private-equity firm BC Partners agreed to purchase a stake in Cablevision Systems to help French billionaire Patrick Drahi finance his company Altice's $17.8 billion takeover of the New York-based pay-TV provider. 

Other recent Canadian acquisitions of U.S. companies include two utility deals: Fortis agreed last month to buy power-line operator ITC Holdings for $11 billion after the target's stock languished, and Emera agreed to acquire Florida power generator Teco Energy for about $10 billion. (All figures include net debt.) Canada Pension Plan Investment Board also made its biggest deal bet last year when it paid General Electric $12 billion for its lending unit that helps buyout firms line up funding. 

Regardless of which way the cross-border activity flows, both U.S and Canada equity benchmarks are slipping this year -- both dragged down by health-care, finance, technology and energy stocks. If anything, the broad weakness probably supports more deals, especially as we await the influx of oil mergers that analysts and bankers have long said is coming should prices remain depressed.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Tara Lachapelle in New York at

To contact the editor responsible for this story:
Beth Williams at