TORONTO - The federal government has confirmed its decision to block a controversial foreign takeover of part of Canada's premier space technology firm, saying the proposed deal would not benefit the country.
Industry Minister Jim Prentice announced the decision early Friday, saying it followed an "extensive and rigorous review process." "I have confirmed my initial decision that I am not satisfied that ATK's proposed acquisition of the Information Systems Business of MDA would likely be of net benefit to Canada," Prentice said in a news release.
Prentice first turned down the $1.3 billion takeover bid for MDA of Vancouver by Alliant Techsystems Inc. (ATK), of Minnesota last month. The giant U.S. munitions and rocket component maker had hoped to buy the entire MDA space division.
MDA is the maker of the state-of-the-art Radarsat 2 satellite which monitors Canada's Arctic sovereignty. The company also designed and built the iconic Canadarm and Dextre robotics for the International Space Station.
The proposed sale of MDA's taxpayer-subsidized space division to ATK caused a storm of controversy. Critics, including prominent voices from Canada's scientific and engineering communities, said Canada would be losing intellectual property that took decades to develop while casting into doubt government control over satellite images that are critical to maintaining Arctic sovereignty.
Alliant Techsystems had 30 days to appeal the decision and the deadline passed Thursday.
Prentice said earlier this week in Washington that he anticipated MDA would continue to be part of Canada's "vibrant space program."
This is the first time the federal government had rejected a foreign takeover outright in the' years since the Canada Investment Act came into effect in'89.
"Foreign investment plays an important role in the Canadian economy," Prentice said Friday, adding that foreign investors bring with them capital, knowledge, capabilities and technology that can increase the productivity, efficiency and competitiveness of Canadian firms.
"However, where a significant transaction does not demonstrate net benefit to Canada, it cannot be approved under the Investment Canada Act," he said.
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