TORONTO — Aecon Group Inc.’s proposed $1.5 billion acquisition by a Chinese state-owned company hit a snag Monday when the federal government announced it is stepping up its national security review of the proposed takeover of Canadian construction company Aecon Group Inc. by a Chinese state-owned business.
Toronto-based Aecon said the minister responsible for economic development informed the company that cabinet has ordered a further investigation of the deal under the Investment Canada Act, that will take more time.
Such reviews target investments made by foreign companies trying to acquire control of Canadian businesses and allow the federal government to stop takeovers it deems to be "injurious to national security."
Since the measures first came into effect, they've only quashed a handful of deals.
Here's how a few takeover attempts fared when faced with government scrutiny:
Last June, China's Hytera Communications got approval to purchase Vancouver-based Norsat International Inc., which developed a satellite system for the Canadian Coast Guard and counts the Taiwanese Army, the U.S. Department of Defense, Fox News and Boeing as clients.
The deal underwent a preliminary security screening, but then the federal government decided to waive a further review and approve the deal.
In the wake of the deal, a U.S. congressional commission pushed for the Pentagon to puts its relationship with Norsat under review, saying Canada's approval of the deal "raises significant national-security concerns for the United States as the company is a supplier to our military."
APPROVED: O-Net Communications, which is partially owned by the Chinese government, purchased Montreal-based ITF Technologies in 2015 and quickly landed approval from then-prime minister Stephen Harper's government.
Harper's cabinet flip-flopped after a national security review warned the deal would speed up China's ability to domestically produce military laser technology meeting Western standards, Globe and Mail sources alleged.
In 2017, Justin Trudeau's government scrapped the decision and called for a new review, which allowed O-Net to keep ITF.
REJECTED: Beida Jade Bird
In 2014, Chinese company Beida Jade Bird wanted to open a 130,000-square-foot alarm manufacturing plant in Saint-Bruno, Que. and hire dozens of employees by the end of 2015. La Presse reported the plans went awry when the federal government forced Beida Jade Bird to undergo a national security review.
Unnamed sources that spoke to LaPresse said the $30-million location was rejected because of its close proximity to the Canadian Space Agency's headquarters.
REJECTED: Manitoba Telecom Services' Allstream
A sale of the Manitoba Telecom Services' business unit Allstream to Egyptian investment group Accelero Capital Holdings was blocked in October 2013 over "unspecified national security concerns."
The deal was valued at $520 million, but when it was unexpectedly spiked, MTS Allstream braced itself for the failed transaction's expenses and restructuring costs to trigger a $35-million loss.
The government's move to block Accelero had many worried because it came just as BlackBerry was putting itself up for sale and as Tony Clement, the then-treasury board president and former minister of industry, reasserted that the country would be stringently reviewing any foreign investment from a national security perspective.
ENDED: Wind Mobile
Amsterdam-based telecommunications company VimpelCom stepped way from its June 2013 bid to acquire Globalive Wireless Management Corp. and its subsidiary, Wind Mobile, just as the deal was awaiting approval from federal regulators.
Some suggested VimpelCom's withdrawal was because approval was taking too long to secure, but the company said only that "it continues to be interested in consolidating its interest in Wind Mobile Canada and in working with the government of Canada to achieve this goal."
REJECTED: Potash Corp.
Mining giant BHP Billiton walked away from a $40-billion takeover bid it had made for Potash Corporation in November 2010, after the federal government ruled that it would not offer net benefits to Canada.
Industry Minister Tony Clement initially declared the government would stop the deal, but gave BHP Billiton an extra 30 days to alter its deal before he made a "final decision."
The proposed deal had been mired in criticism from Saskatchewan Premier Brad Wall, who had pushed for the federal government to "stand up for Canada and Canada's national strategic investments" by denying the bid, which the province complained would wreak havoc on its economy because of potash's prominent role in Saskatchewan's food production.
REJECTED: MacDonald Dettwiler and Associated Ltd.'s space division
In April 2008, the federal government stopped a $1.3-billion deal that would have seen Vancouver-based MacDonald, Dettwiler and Associates' space division, which refurbished the Canadarm, find a new home at the U.S.-based Alliant Techsystems Inc.
Industry minister Jim Prentice said the sale was blocked because "we don't see net benefits to Canada in this transaction."
It was reportedly the first deal stopped by Industry Canada since its act came into effect in 1985.
Before Prentice announced the ruling, Canadian Space Agency head and former astronaut Marc Garneau argued it would result in taxpayer-funded technology being sold off and would hamper the future of Canada's satellite-building capabilities because MDA had exclusive global rights to images taken from the RADARSAT-2 satellite.
After the sale was blocked, the federal government amended the Investment Canada Act national security test and warned that fewer foreign investments in the country would meet its requirements.
Since then, MDA has transformed into a U.S. company and is listed on the New York Stock Exchange with a new name, Maxar Technologies.
Tara Deschamps, The Canadian Press