The Asia-Pacific Antitrust Review 2014

Canada: Foreign Investment Review

Canada’s foreign investment review regime under the Investment Canada Act (the 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. In 2013, 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. Also in 2013, the proposed acquisition of Allstream, a division of MTS Telecom Services, by Accelero Capital Holdings Inc was blocked based on national security concerns, and Lenovo reportedly did not proceed with respect to a possible bid for Blackberry because the Canadian government had expressed similar security concerns with its proposed ownership of that communications company.