Canadian Lawyer InHouse

9 CANADIANLAWYERMAG.COM/INHOUSE JULY/AUGUST 2018 A roundup of legal department news and trends Death of Aecon Group Ltd. deal signals uncertainty of deals involving Chinese SOEs T he federal government's decision to block the acquisition of Aecon Group Ltd. by a Chinese state- owned enterprise signals the difficulty of determining upfront if future investment from Chinese SOEs will be approved. Following a full national security review launched in February by the federal gov - ernment, Economic Development Minister Navdeep Bains announced the feds were blocking the proposed $1.5-billion acquisi- tion of Aecon by China Communications Construction Company International Hold- ing Ltd., citing national security concerns. "It is becoming increasingly difficult to predict and you clearly can't take anything for granted anymore when you're dealing with an acquisition involving a Chinese SOE," says Chris Hersh, partner in the competition, antitrust and foreign invest - ment group at Cassels Brock & Blackwell LLP in Toronto. Hersh says it could mean Canada sees less Chinese investment by SOEs in the future. "Why invest the money and time if you have to go through a process that is uncertain?" he says. "There is an inherently political element to allow or disallow a transaction involving a Chinese SOE." In the last year, the Trudeau government has approved other deals involving Chinese SOEs. In June 2017, the Trudeau govern - ment allowed China-based Hytera Com- munications Corp. to acquire Vancouver- based Norsat International Inc, a satellite technology company that had contracts with U.S. military and NATO partners. The U.S. congress warned about national security concerns relating to that deal; how - ever, the federal government didn't do the same formal review of that transaction as it did with Aecon. Aecon executive vice president and chief legal officer Yonni Fushman declined to comment on the decision, but in a press statement, the company's president and CEO John Beck said the deal with CCCI would have put Aecon in a better position to compete against large companies. "I think it's fair to say that a lot of people didn't think this [Aecon] would be the deal they would block under national security concerns," says Hersh. "That's not to say there weren't justifiable national security concerns, but the national security review process is really a black box and there is very little information other than the criteria the government has put out as to why they have allowed some deals and not allowed other deals." IH What's your biggest challenge managing in-house? Growth of your organization? Recruiting? Legal costs? Weigh in on these and other issues. Survey is open from August 6 – September 10 canadianlawyermag.com/surveys Canadian Lawyer Corporate Counsel Survey T H E A N N U A L ATTENTION IN-HOUSE COUNSEL! C O M I N G S O O N O M I N G Untitled-6 1 2018-06-12 12:18 PM

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