Opposition MPs called Thursday for a federal review of Xstrata PLC's hostile takeover bid for Falconbridge Ltd., just one day after the Swiss-based mining company's $16.1-billion offer for the 80 per cent of the miner it doesn't already own.
Liberal MP Mark Holland, a member of the House of Commons industry committee, said he will ask the committee during its next meeting on May 30 to schedule a review of the proposed deal.
NDP Leader Jack Layton went one step further, calling on the government to use the Investment Act to kill the deal without a review.
Mr. Layton questioned Xstrata's reputation as an employer, saying its proposed takeover is clearly not in the national interests.
“We don't see how it promotes Canadian sovereignty, the strength of the Canadian industry,” he said outside the House of Commons. “We believe that it's very important that as much as possible our natural resources be held in Canadian hands so that there's at least some commitment to the long-term and sustainable development of our resource-based industries and communities.”
Xstrata's all-cash offer for Falconbridge was made public about a week after Vancouver-based Teck Cominco Ltd. offered $17.8-billion in cash and shares for Inco Ltd., which last year agreed to a friendly acquisition of Falconbridge. That proposed deal is still waiting for regulatory approval in the U.S. and Europe.
Industry Minister Maxime Bernier, known as a strong advocate of open markets and minimal government involvement in the economy, hasn't yet spoken publicly about the Xstrata proposal. A spokeswoman also wouldn't comment.
James Rajotte, a Conservative MP and chairman of the industry committee, said it's too early to judge the proposed takeover, but he's open to a committee review if members want one.
A senior government official said the proposed takeover isn't high on the Harper government's agenda and that it's unlikely that Ottawa will raise any roadblocks.
The Conservatives have no members from the cities — Toronto and Sudbury, Ont. — that would be most affected by the proposed deal.
NDP MP Brian Masse, also a member of the industry committee, wrote to Mr. Bernier Thursday to express “great concern” that, among other things, the minister appears to be “indifferent” to the proposed Xstrata takeover. Mr. Masse urged Mr. Bernier to reject the proposed deal and to conduct public hearings on the foreign investment process. “I would suggest that many Canadian companies, workers, and citizens are not indifferent to the loss of control of Canadian natural resources, and the economic and social consequences such takeovers often cause.”
As The Globe and Mail reported earlier this week, the federal government plans to broaden its power to reject foreign takeovers of Canadian companies, particularly making it easier for Ottawa to quash an acquisition that might pose a threat to national security.
The Investment Canada Act gives the government broad powers to review and reject just about any corporate acquisition that is worth more than about $250-million if the deal is deemed not to be in Canada's interests. However, unlike most industrialized countries, Canada leaves smaller deals, even if they involve companies in sensitive areas such as defence, unregulated.
The Act, which became law in 1985, has never actually been used to reject any foreign takeovers of Canadian companies, although many deals have been altered before receiving approval.
Mr. Holland said Canada needs to find a balance between attracting foreign investment and ensuring that it doesn't lose all of its corporate headquarters to takeovers.
“I think the jury is still out on whether or not this is in or against Canada's interests.”
