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Pacific trade pact to ease foreign takeover scrutiny in Canada

Published 2015-11-05, 12:11 p/m
© Reuters. Pacific trade pact to ease foreign takeover scrutiny in Canada
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TORONTO, Nov 5 (Reuters) - Regulatory scrutiny of foreign
takeovers of Canadian companies would ease once the
Trans-Pacific Partnership trade deal takes effect, according to
terms of the deal released on Thursday.
Those details showed investments of less than C$1.5 billion
($1.14 billion) in Canadian businesses would not be subject to a
review under the Investment Canada Act if the investing company
is based in one of the 12 original signatory countries that are
part of the trade deal.
Currently any deal over the C$600 million mark is subject to
a review by the Canadian government. That review threshold is
set to rise gradually to C$1 billion by 2019.
The TPP is set to reduce tariffs and trade barriers among
the United States, Canada, Mexico, Chile, Australia, New
Zealand, Japan and five other countries. It does, however, place
some limitations on the types and specific areas of investment.
The deal states that the higher threshold would not apply in
the case of a direct acquisition of control by a state-owned
entity in a Canadian business. Any such deal would trigger a
review if it is worth more than C$369 million.
The higher review thresholds also will not apply to
acquisitions of cultural businesses, such as publishers, audio
and video production companies.
The document also indicates that the Canadian government has
the right to cap foreign ownership in certain companies, namely
the country's largest airline Air Canada AC.TO , uranium miner
Cameco Ltd CCO.TO and a few others.
($1 = 1.3164 Canadian dollars)

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