By Sean B. Pasternak Jan. 8 (Bloomberg) -- Oil and gas companies will increase acquisitions in the first half of 2010, particularly in Asia, said Adam Waterous, Scotia Capital’s global head of investment banking. “The first half specifically will be a very active period,” Waterous, 48, said today in Calgary in a telephone interview. “There are a number of large companies that have made decisions to rationalize their businesses.” Waterous, who joined the investment-banking arm of Bank of Nova Scotia when Canada’s third-biggest bank bought Calgary- based oil-and-gas advisory firm Waterous & Co. in 2005, said many firms are restructuring their assets, which could lead to more stock sales and financing activity. The Toronto-based lender was third in advising on Canadian stock equity, equity linked and preferred sales last year, with 47 transactions valued at $6.24 billion, according to Bloomberg data. That’s up from fourth place in the year-ago period. Globally, the energy industry is expected to have the most merger-and-acquisition activity this year, according to Bloomberg’s 2010 M&A Outlook survey. “A meaningful portion of our deal pipeline involves Asian entities,” Philip Smith, Scotia Capital’s deputy head of global investment banking, said in Toronto in the conference call interview with Waterous. “As a region, they’re becoming increasingly important.” ‘Pretty Good Pipeline’ Smith, 43, said he visited China to discuss transactions about a dozen times last year, up from “two or three” in 2008. Mining transactions, particularly among bullion producers, are also likely to increase in 2010, Smith said. Mining executives said in November that companies including Toronto- based Barrick Gold Corp., the world’s largest gold producer by market value, and Vancouver-based Goldcorp Inc., the second largest, may attempt to take over smaller firms such as Osisko Mining Corp. in Montreal to increase output. Smith said Scotia Capital has a “pretty good pipeline” for initial public offerings, including deals abroad, although he couldn’t predict the timing. PricewaterhouseCoopers LLP said this week that Canadian companies may raise as much as C$4 billion ($3.88 billion) in initial public offerings this year, more than double last year’s amount. Ottawa-based Mitel Networks Corp. said last month it plans to raise as much as $230 million in an initial stock sale. “I think you’ll see companies testing the waters,” Smith said. “Sometimes being a first mover can be an advantage.” To contact the reporter on this story: Sean B. Pasternak in Toronto at spasternak@bloomberg.net.

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