On December 7, 2012, the Canadian government approved two proposed investments in Canadian energy companies by state-owned enterprises (SOEs) under the Investment Canada Act (ICA): the proposed acquisition by PETRONAS of Progress Energy Resources Corp. (Progress) and the proposed acquisition
Trends in Q3 M&A activity
Canadian M&A activity was down sharply in Q3, but the proposed $15.1 billion takeover of Nexen Inc. by China National Offshore Oil Company Limited drove the overall value of deals up 23% over Q2 and 16% over Q3 2011. PricewaterhouseCoopers
M&A Trends for Q2
Yesterday Price Waterhouse Cooper released its Q2 M&A report on the 721 deals worth $47.7 billion announced in that quarter, and there were a few surprises. Although deal volumes, as expected, declined 7% over Q1 and 14% over Q2 2011,
M&A trends look positive in 2012
Grant Thornton recently released its 20th annual International Business Report on M&A in which it suggests the market for M&A looks strong both globally and in Canada, as businesses look to invest cash resources built up over a period
Amendments to Investment Canada Act intended to increase transparency
On April 27, 2012, the federal government announced it would amend the Investment Canada Act to allow the Minister of Industry greater flexibility in explaining why a proposed foreign takeover of a Canadian business raises preliminary concerns. The amendments, contained in the government’s annual budget bill, will also empower the Minister to accept offers of security as a performance guarantee.
Canada’s foreign investment regime requires that any acquisition of control of a Canadian business by a non-Canadian, where the book value of the assets of the Canadian business exceeds a prescribed threshold (currently C$330 million), be reviewed and approved by the Minister of Industry before closing. The Minister must determine the transaction is likely to result in a “net benefit” to Canada, based on a number of factors contained in the Act. In the 26-year history of the Act, governments have used it only twice to block transactions: once in 2008 when Aliant Techsystems tried to buy MacDonald Dettwiler & Associates Ltd.’s aerospace business, and then in 2010 when BHP Billiton sought to acquire Potash Corporation.