Recent Developments of Importance: Competition
|Area||Competition, Antitrust and Foreign Investment|
Article originally published in the 2016 Lexpert/American Lawyer Guide to the Leading 500 Lawyers in Canada
Excerpt from “Recent Developments of Importance: Competition”:
Tackling the Challenges of Increasing Uncertainty in Foreign Investment Reviews of Mergers and Acquisitions
The interim denial by the Canadian government of BHP Billiton’s (BHP) 2010 hostile bid for Potash Corporation of Saskatchewan (Potash) caught many M&A advisors off-guard. What was unprecedented about that decision was the degree of national protectionism encompassed within the application of the net benefit test under the Investment Canada Act (the ICA). That refusal did not turn out to be an isolated incident, however. Since that time, there has been a steady increase in the breadth of national security considerations reflected in negative foreign investment reviews of both proposed and completed transactions in Canada. While the overwhelming majority of reviews are still successful, contentious reviews have accentuated the uncertainty around deal-making in an era marked by an increasingly insecure geopolitical world order, greater fears over electronic monitoring and related security issues, as well as accelerating global investment from state-owned enterprises and sovereign wealth funds.