Canada considers security test for foreign takeovers
Canada is considering a national security test for foreign takeovers of Canadian companies amid increasing deals.
By Agencies |
TORONTO: Canada is considering a national security test for foreign takeovers of Canadian companies amid public concern over a series of deals that involved the sale of some of the country's most iconic companies to foreign buyers.
Canadian Finance Minister Jim Flaherty said Monday that corporate Canada is well-positioned when it comes to global takeovers and the government would not institute drastic measures to prevent so-called ``hollowing out,'' but the changes could block certain investments on national security grounds.
``Let there be no doubt of the government's view that increasing foreign direct investment has certainly been a priority of our government and that it is imperative if we are going to expand and strengthen our economy,'' said Flaherty during a speech in Toronto, adding that changes could be instituted within 6 months.
This past year iconic Canadian companies such as miners Inco and Falconbridge, Hudson's Bay Co. and aluminum giant Alcan Inc. were sold to foreign buyers.
Shortly after this spate of buyouts, the federal government established a competition policy review panel to investigate Canada's policy options on foreign takeovers.
The panel, headed by former Bell Canada CEO Red Wilson, in conjunction with a study conducted by consulting firm SECOR, found that while Canadian companies are active buyers in the merger-and-acquisition market when it comes to the number of transactions, they're ``buying small and selling big.''
SECOR said Canada had become a significant net seller in terms of value, with the steepest increase in the value of inbound deals taking place from 2005 to 2007.
Over that period, the cumulative ``net deficit'' of outbound to inbound deals was US$24.3 billion.
The SECOR study looked at deal announced on or before December 31 with a deal value greater than US$1 million.
Canadian Finance Minister Jim Flaherty said Monday that corporate Canada is well-positioned when it comes to global takeovers and the government would not institute drastic measures to prevent so-called ``hollowing out,'' but the changes could block certain investments on national security grounds.
``Let there be no doubt of the government's view that increasing foreign direct investment has certainly been a priority of our government and that it is imperative if we are going to expand and strengthen our economy,'' said Flaherty during a speech in Toronto, adding that changes could be instituted within 6 months.
This past year iconic Canadian companies such as miners Inco and Falconbridge, Hudson's Bay Co. and aluminum giant Alcan Inc. were sold to foreign buyers.
Shortly after this spate of buyouts, the federal government established a competition policy review panel to investigate Canada's policy options on foreign takeovers.
The panel, headed by former Bell Canada CEO Red Wilson, in conjunction with a study conducted by consulting firm SECOR, found that while Canadian companies are active buyers in the merger-and-acquisition market when it comes to the number of transactions, they're ``buying small and selling big.''
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SECOR said Canada had become a significant net seller in terms of value, with the steepest increase in the value of inbound deals taking place from 2005 to 2007.
Over that period, the cumulative ``net deficit'' of outbound to inbound deals was US$24.3 billion.
The SECOR study looked at deal announced on or before December 31 with a deal value greater than US$1 million.
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