Michael Kilby discusses Canada’s national security review process with The Globe and Mail

March 5, 2020
Michael Kilby, Co-Head of Stikeman Elliott’s Competition & Foreign Investment Group in Toronto was featured in an article from The Globe and Mail about Canada’s increased focus on national security reviews in recent years, with the vast majority aimed at investments coming from China.

Michael spoke to three high-profile cases that illustrate the Canadian government’s seeming ambivalence with respect to Chinese investment, including state-owned China Communications Construction’s C$1.5B bid to acquire construction and engineering company Aecon Group. Market watchers expected the deal would be cleared, though perhaps with conditions imposed, but the government ultimately blocked it in May 2018.

“Each successive major Chinese investment presents a new challenge to the Canadian government, given the intense public scrutiny and criticism that it inevitably attracts, and 2018 has confirmed the long-held view that not every Chinese investment in Canada will be approved," said Michael.

He explained that advising clients on the national security review process has changed significantly in recent years. From a procedural standpoint, the government now urges foreign investors to notify Ottawa of a proposed deal at least 45 days before closing the transaction. Most investments do not attract such scrutiny, but lawyers will weigh this risk when advising clients on how to approach closing dates.

“Another implication is that when a Canadian business has multiple potential buyers, the business and its advisers would do well to make a comparative assessment of the different bidders and the risks that they present, given that certain bidders may present substantial risk,” said Michael.

Michael heads Stikeman Elliott’s Competition & Foreign Investment Group, which is recognized as an “Elite” top-tier competition practice by GCR 100. The group has acted in the most noteworthy foreign investment transactions in recent years, representing both Canadian targets and foreign purchasers. Clients rely on the team’s unique ability to coordinate the increasingly important public relations and government relations aspects of competition and foreign investment review.

Read the full article here.