Canada: Take-Overs are not foreign investment

The control that any society has over its own economy is vital. Take-overs often do not serve the national interest. The Harper government misleads Canadians on claiming that take over of Canadian companies are “foreign investment” which “saves jobs”. Often such take-overs bring mass . Furthermore, such take-overs being managers who seek to import their often sub-standard labour practices into Canada. The Harper government’s rhetoric on take-overs is self-serving, and is propaganda in behalf of the financially affluent capitalists who support his government along with elites in the Liberals, BQ and NDP.

( -- Foreign takeovers of prominent Canadian companies make headlines when they are proposed. They frequently draw opposition from economic nationalists and labour groups, but are rarely blocked by the federal government.

Calgary-based oil and gas producer Nexen Inc.announced Monday that it has agreed to be purchased for $15.1 billion US by the China National Offshore Oil Co. (CNOOC), which is owned by the Chinese government.

Nexen is Canada’s 12th largest energy company. The proposed takeover must be approved by shareholders and the federal government, which will consider whether a takeover is of “net benefit” to Canada.

The threshold that triggers a government review of a takeover is a company asset value of $330 million, although the government plans to raise that to $1 billion over the next four years, Industry Minister Christian Paradis said in May.

Some other notable foreign takeovers of Canadian companies include:

-- Swiss-based Glencore International PLC receives approval from the Canadian government on July 15, 2012, for its $6.1-billion bid to take over Viterra Inc., a Regina-based agribusiness. Glencore expects to complete the deal after a review by regulators in China, Australia and New Zealand, where Viterra has operations.

-- Brazilian mining giant Vale acquires Toronto-based Inco, the world’s second-largest nickel producer company, for $19.4 billion in 2007.

-- U.K.’s Rio Tinto takes over mining and aluminum company Alcan in a $38-billion US deal in 2007

-- Swiss company Xstrata acquires Toronto-based copper and nickel mining company Falconbridge in a 2006 deal that values the company at approximately $24.1 billion.

-- U.S. Steel Corp. takes over Canadian steel-maker Stelco in 2007. The federal government sued U.S. Steel after it said the company failed to live up to promises it made to maintain investment in Canada. A settlement was reached in December 2011 under which U.S. Steel will maintain Canadian operations until at least 2015 and make a further investment of $40.7 million.

-- Graphics chipmaker ATI Technologies based in Markham, Ont., is acquired by U.S. company Advanced Micro Devices in October 2006 in a deal valued at $5.6 billion US.

-- The Caterpillar Inc. takeover of locomotive builder Electro-Motive in London, Ont., in 2010 is questioned when Caterpillar closes the plant permanently in February 2012, after failing to obtain demands workers accept pay cuts as deep as 50 per cent.

Foreign takeovers of Canadian companies reviewed under the Investment Canada Act have almost always received approval. There have been two exceptions in recent years.

-- Australian company BHP Billiton withdrew its $40-billion takeover bid for the Potash Corporation of Saskatchewan in November 2010 after the Canadian government ruled it would not provide a net benefit for the company.

-- MacDonald, Dettwiler and Associates Ltd., the Canadian space and satellite technology company that developed the robot arm for the space station, was the target of a $1.3-billion takeover attempt by Alliant Techsystems of Minnesota. The federal government blocked the sale of the company, which was considered a strategic asset for Canada.


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