Legal news and trends for Canadian in-house counsel and c-suite executives
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COVERSTORY "We controlled the entire process, and that contributed very significantly to the level of success we attained." — DAVID MCAUSLAND, ALCAN INC. Would it be Xstrata, BHP Billiton or Rio Tinto? At the end of the day, shareholders were in favour of the Rio Tinto bid, which was nearly one-third greater than Alcoa's of- fer. Despite the higher price for shares, the new merger would also keep jobs in Quebec. In fact, Rio Tinto Alcan is now head- quartered in Montreal. Joining forces with Rio Tinto — which is largely an iron ore and copper miner — was also more ap- pealing to Alcan. The deal was announced last July, but the merger still had to go through numerous hoops with anti-competition regula- tors. European, Australian, and French regulators all needed to approve the merger. The last hurdle was getting approval from Industry Canada (which it did in October). Less than a week before the offer was set to expire, Rio Tinto Alcan had all the approvals needed for the union. So how does one prepare for such a deal before it happens? "At the end of the day, it's about thinking forward," McAus- land explains. "Where things are going and where you want to direct them, as opposed to where they are. "It's not something you can just sit down and prepare for in one shot and say 'I've got a manual ready for that.' It's constantly looking to the future, thinking about what can happen, always re-evaluating the permutations and combinations around the fundamental rules of the game, and how do you want to be able to influence those rules to the extent you can. It's a file that's always open. It has to be." He says that a key to the success of the deal, as with any deal, was the ability to control the process to a high degree. "We controlled the entire process, and that contributed very significantly to the level of success we attained," he says. "The success is, I think, very, very heavily based on process control. 18 FEBRU AR Y 2008 C ANADIAN Lawyer INHOUSE