September 21, 2011
Government scrutiny is nothing new in the mergers and acquisitions business. In Canada, large transactions always face review by the Competition Bureau and under the Investment Canada Act.
Two high-profile events might suggest that we're entering a new era of government attention. Last year, the federal government blocked the proposed purchase of Potash Corp. of Saskatchewan by global mining giant BHP Billiton PLC. And this year, politicians in Ontario held hearings into the proposed merger between the companies that run the stock exchanges in Toronto and London.
Dany Assaf says it would be wrong to overestimate or misinterpret the Potash rejection as a signal that Canada is becoming hostile to foreign investors.
But he also understands how the rejection may cause some worry. Investors want clarity, transparency and certainty in the approval process so they can make an assessment on whether to pursue a deal or an investment. These days, competition lawyers are working to assure clients from overseas that Potash was an unusual situation.
"It's very important to have a discussion about this in a transparent way," Dany says. "When there's a void, people fill it in with misinformation, and that creates even more uncertainty."