The Antitrust Review of the Americas 2014

Canada: Foreign Investment

Canada’s foreign investment review regime under the Investment Canada Act (Act) continues to generate controversy and present challenges in relation to a select number of transactions each year. The first formal rejection of a transaction (outside the cultural arena) under the Act occurred in 2008 in relation to a bid by US-based Alliant Techsystems Inc to acquire MacDonald Dettwiler Associates Ltd, a Canadian aerospace company. In 2010, a preliminary rejection under the Act resulted in BHP Billiton abandoning its bid for Potash Corporation of Saskatchewan. The effort by the London Stock Exchange to merge with the TMX, operator of the Toronto Stock Exchange, in 2011 attracted the foreign investment regime’s attention, although the failure of that transaction was not attributable to the regime. The 2012 proposed acquisitions by CNOOC of Nexen and by Petronas of Progress Energy served as catalysts for changes to the way foreign state-owned enterprises (SOEs) are treated under the Act. This year, Orascom Telecom withdrew its offer to acquire Wind Mobile, a Canadian cellular business. While the reasons for the decision to withdraw were not publicised, national security concerns may have been raised during the review process under the Act. If correct, this appears to be at least the second time that national security has impacted on a proposed transaction. In 2009, it appeared that an intervention by the minister under the (then) new national security review provisions played a role in the termination of a proposed acquisition by George Forrest International of Forsys Metals which was involved in uranium exploration and development activities in Africa.

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