Chris Hersh has been quoted in the article “Encana Move to U.S. Means Foreign Takeover Would No Longer Require Canadian Approval,” published by The Globe and Mail.
Writes Jim Urquhart: “As a side effect of [Encana’s] planned move to the U.S., if the company did attract a foreign buyer, lawyers say it would not face a review under the Investment Canada Act (ICA), which requires proof that deals for companies worth more than about $1 billion represent a ‘net benefit’ to Canada. It is ultimately the federal minister of Innovation, Science and Economic Development (ISED) who must grant approval under the ICA.”
Says Chris: “To satisfy the minister of ISED that the deal is a net benefit, the investor typically has to give significant undertakings regarding how they plan to operate the Canadian business on a go-forward basis…. Once the Investment Canada Act no longer applies to a transaction, the government certainly loses the ability to get those net benefit undertakings.”
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