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Quebec was disappointed with the recent sale of gold producer Osisko Mining to Yamana Gold Inc. and Agnico Eagle.


Sitting in his office in Laval, Que., his back to the high windows that overlook a beautiful forest, a rarity in this disfigured Montreal suburb, Alain Bouchard is ranting. "Don't get me started," says the president and chief executive officer of Alimentation Couche-Tard Inc.

The object of his aversion on this sunny day is the generous amount of government aid given to the McInnis Cement plant under development in Quebec's Gaspé region, a project spearheaded by the family of Laurent Beaudoin, chairman and former CEO of Bombardier Inc.

Mr. Bouchard, who recently said before the Montreal Board of Trade that Quebec was the welfare bum of Canada, has as much respect for what he calls "subsidy suckers" as he does for unions – which is not a whole lot.

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The outspoken executive is no less frank when he deals with European executives.

Just hours before, Mr. Bouchard spoke with Statoil SA's CEO, and the two lamented how long it is taking to transform the Norwegian company's former retail operations, which Couche-Tard acquired for $2.6-billion (U.S.) in 2012.

Scandinavian regulations are stiff by North American standards. "Can you believe you have to keep the windshield washer jugs in a strong box?" Mr. Bouchard says.

And while he knew what he was getting into – he quietly visited some 200 stores before Couche-Tard made its offer – he is still amazed at the business culture clash between North America and Scandinavia. "It's like they have no sense of urgency," he says.

Couche-Tard is part of a growing contingent of Quebec companies that have moved beyond cross-border shopping to hunt acquisitions all over the world.

Aircraft landing gear manufacturer Héroux-Devtek Inc. landed in Europe for the first time in February with the acquisition of U.K.-based landing gear maker APPH Ltd., a $124-million (U.S.) deal. The Longueuil-based company is following in the footsteps of CGI Group Inc., which doubled its size when it bought Logica PLC in 2012 for $3.2-billion (including debt), its biggest deal ever. Meanwhile, St-Laurent cheese maker Saputo Inc. went hostile for the first time in 23 acquisitions to snatch Australian dairy producer Warrnambool Cheese & Butter Factory Co. Holdings Ltd. for close to $600-million.

And it is not only large Quebec companies that are making inroads abroad. Smaller ones like Premier Tech Ltd., a sphagnum peat moss producer from Rivière-du-Loup in the Lower Saint-Lawrence region, has clinched 20 companies from Ireland to Sri Lanka since 2000.

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And herein lies the paradox in a province that was traumatized by the 2007 acquisition of Alcan Inc. by mining giant Rio Tinto Group PLC and disappointed with the recent sale of gold producer Osisko Mining Corp. to Yamana Gold Inc. and Agnico Eagle Mines Ltd.

Quebec wants to erect some of the strictest defences against hostile takeovers in North America. All the main political parties at Quebec's National Assembly – including the ruling Liberal Party – support stronger measures to protect Quebec's companies from takeovers.

And yet, when you look more closely at the data on mergers and acquisitions, the province is much more predator than prey, KPMG-Secor concluded in a recent report. The consulting firm reviewed all transactions involving a publicly traded Quebec company worth $1-million or more between January, 2001 and July, 2013. Acquisitions abroad (402) far outnumbered the sale of Quebec firms (269) over the period. There is even a six-fold difference between what Quebeckers have bought abroad versus what foreign investors acquired in Quebec when business units are also factored in.

Over those 12 years, the value of what Quebec companies bought abroad is equal to what foreigners acquired in the province, roughly $90-billion. But if you exclude the $38.1-billion (U.S.) Alcan deal, an aberration at the peak of the commodities boom, the assertiveness of Quebec companies is apparent.

Ontario remains the province that exhibits the biggest appetite for foreign companies and business units in absolute terms. But when the size of the Quebec economy is taken into account – it has fewer companies with generally lower market capitalizations – the province's companies are actually the most venturesome in the country, according to KPMG-Secor partner Daniel Denis.

'You can't stay local'

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Standing in the crowded community centre of the quaint village of Port-Daniel, in the Gaspé region, Laurent Beaudoin is unfazed by the criticism his family's new project is receiving from the local cement industry, which is crying foul over the arrival of a government-financed rival.

With McInnis Cement, his family's biggest venture outside of Bombardier and BRP Inc., the maker of Ski-Doos and other recreational products, Mr. Beaudoin is looking at opportunities in the U.S. Northeast.

Bombardier's own history is punctuated by foreign acquisitions. It purchased plane manufacturer Short Brothers PLC from the British government in 1989, and DaimlerChrysler's rail unit Adtranz in 2001.

"Everything boils down to our geographical situation. When you have such a small market, you can't stay local. If you want to grow, you have to go the world," he said. He adds Quebec is no different than other small countries such as Finland or the Netherlands, out of which Nokia Corp. and Koninklijke Philips Electronics NV grew, respectively. "You don't have a choice," Mr. Beaudoin says.

It is an assessment so evident it may seem commonplace today, and yet Quebeckers picked up early on the importance of opening up to the world. They endorsed the Canada-U.S. free-trade agreement wholeheartedly, notably in the industrious Beauce region that is so closely tied to the United States. And with the push by former premier Jean Charest, Quebec also spearheaded the trade negotiations that last fall led to an accord in principle over liberalizing trade between Canada and Europe.

"As soon as Quebeckers venture outside of the province, they often feel, for linguistic reasons, that they are in a foreign country. For them, the Ontario, the American, or even the British markets are not so different in that respect. That has given them a broader vision of the world," says Louis Hébert, professor of strategy at the business school HEC Montreal.

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"It is a nice contradiction. Quebec has less entrepreneurs and exhibits less of an entrepreneurial spirit than other provinces. But the entrepreneurs we do have possess a global vision," Prof. Hébert says.

Alain Bouchard recounts that when he started in business, he wanted to build a conglomerate in the style of the late Paul Desmarais, whom he admired. But Mr. Bouchard and his three partners quickly realized that they could not excel at everything. So they gave up on a number of ventures, from telephone recycling to auto parts. However, Mr. Bouchard never abandoned his dream of setting foot on every continent, even as he started his convenience-store empire, which now boasts $35.5-billion in annual revenue.

Mr. Bouchard recalls the chilly reception he received at an investor conference in Toronto when he evoked the idea of buying an American chain. "They felt we would fall flat on our face, like so many other Canadian retailers had before us, and our stock didn't move for a year," he says.

After the United States, Couche-Tard looked for opportunities in Asia (too many changing rules) and South America (no openness to a partnership with family empires) before landing big in Europe.

While Europe, notably France, has always attracted Quebec entrepreneurs, such as the Lemaire brothers who founded paper giant Cascades Inc., and the Desmarais family, not all succeeded there.

In 2007, Quebecor World abandoned the European operations that former CEO Pierre Karl Péladeau had patiently built after failing to restructure its printing activities, which contributed in no small way to the company's misery.

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A long-term perspective

There is no misery in sight at CGI Group's annual meeting in the posh oval room at the Ritz-Carlton hotel in Montreal. The memory of losing a lucrative U.S. government contract after the botched rollout of its Obamacare website has almost faded, and this shareholders' reunion has all the appearance of a love-in.

"Over the last 20 years, we have doubled in size every three years," says executive chairman Serge Godin, beaming at the centre of the stage as shareholders applaud him.

In Quebec, Mr. Godin is the all-around champion of acquisitions. He has concluded over 70 deals since he co-founded the company in 1976. CGI grew out of necessity: The Montreal-based company had to beef up its operations so it wouldn't miss out on contracts from large clients. This was especially true when multinationals started contracting out their IT systems and requested a global rollout of their outsourcing.

But if companies such as CGI have grown to become global champions, it is because of what Mr. Godin calls "continuity in management." That continuity, he argues, comes from the long-term perspective allowed by multiple-voting shares – shares chided by corporate governance experts, where entrepreneurs and their families can retain control of a company even though their capital ownership has been diluted through successive stock offerings.

"The average turnover for a CEO at the head of a widely held company is three years. How do you think you can successfully compete on the world stage and conclude major transactions in such a short time span?" Mr. Godin asks in an interview.

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And Mr. Godin, like many Quebec executives, won't quit any time soon, as CGI now aims to double its size in five to seven years. "People ask me 'When will you stop?' In fact, we just won't."

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