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ARTICLE · 29 APRIL 2008

Rejection Of Proposed Acquisition May Signal More Rigorous Enforcement Approach

On April 10, 2008 the Federal Minister of Industry, Jim Prentice, publicly confirmed that he has rejected the planned CDN$1.325 billion sale of MacDonald, Dettwiler and Associates Ltd.’s (MDA) Information Systems and Geospatial Service Operations division to U.S-based Alliant Techsystems Inc.

CanadaAntitrust/Competition Law

On April 10, 2008 the Federal Minister of Industry, Jim Prentice, publicly confirmed that he has rejected the planned CDN$1.325 billion sale of MacDonald, Dettwiler and Associates Ltd.'s (MDA) Information Systems and Geospatial Service Operations division to U.S-based Alliant Techsystems Inc. (ATK). The Minister's rejection may signal a more rigorous enforcement approach to proposed acquisitions.

The basis for the Minister's rejection of the sale is that he is not satisfied that the investment is "likely to be of net benefit to Canada" as required under the Investment Canada Act (ICA). Media reports have indicated that, while there may have been other factors at play, national security concerns relating to Arctic sovereignty and the feared loss of control over the Radarsat-2 satellite operated by MDA have played an important role in the Minister's decision.

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