Canadian Lawyer InHouse

November/December 2019

Legal news and trends for Canadian in-house counsel and c-suite executives

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Page 19 of 43

20 CROSS BORDER NEVER HAS THE LANDSCAPE for interna- tional trade been more uncertain, with evolving regulatory requirements and foreign invest- ment laws, the ongoing U.S./China tariff dispute and political uncertainty south of the border — not to mention Brexit, threatening major disruption in the European supply chain. Ratification of the United States-Mexi- co-Canada Agreement has been delayed, leading to further uncertainties in North American trade deals and M&A. While change brings disruption and challenges, it also offers opportunities, and many businesses will be exploring new markets. With political turmoil in other countries, Canada is seen as a safe haven for many foreign investors. "I think that, in some ways, Canada having a relatively stable political climate is increasing the velocity in which non-Canadian companies are looking to invest here," says David Kruse, a partner at Blake Cassels & Graydon LLP. "We've seen very steady private M&A transactions with non-Canadians investing in Canada over the past two or three years. Canadian assets are very attractive." Marshall Pawar, a partner at boutique firm MEP Business Counsel, has also observed an increase in foreign investors looking to buy in Canada, which may be as a result of political uncertainty in the US. Whereas M&A used to be reserved for large billion-dollar deals, he now sees many smaller companies jumping into the cross-border M&A realm. With the upswing in foreign investors heading to Canada comes a rise in the number of investors entering unchartered territory, without knowledge of Canadian regulations. Seeking Canadian counsel is important to avoid complications with tax, securities, competition laws and foreign investment rules. One issue that often arises in M&A when a U.S. buyer is acquiring a Canadian company is the reluctance of American buyers to obtain Canadian counsel right from the outset to advise on country-specific laws and regula- tions, according to Alan Litwack, a partner at Dickinson Wright LLP. "Sometimes, people don't recognize that, even though the companies are quite similar, there are significant differences in corporate laws and employment and HR laws. It's important to engage local counsel on matters of the deal that relate to various aspects of local Canadian law because the underlying legal systems, while similar in many ways, are also different in many," says Litwack. Firms Foreign investors head to Canada With political turmoil in other countries, Canada is seen as a safe haven for investors "An in-house M&A lawyer can add real value to the integration team by helping to identify Day 1 risks, understanding workstream interdependencies and planning mitigating strategies." Kathleen Orysiuk, assistant general counsel, Siemens Canada

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