(Montreal) The sale of Quebec flagship Héroux-Devtek to an American company will be examined under the Investment Canada Act (LIC), said the Federal Minister of Innovation, Science and Industry, François-Philippe Champagne.
The Longueuil-based aircraft landing gear maker announced earlier this month that private equity firm Platinum Equity Advisors will acquire all of its outstanding shares.
The transaction is valued at 1.35 billion.
Mr. Champagne said it was “worrying” to see a “Quebec champion who is one of the key players in the aerospace industry” come under the control of foreign investors.
“It always raises questions. […] It is certain that this transaction will be subject to the Investment Canada Act“We will have more to say when we have done this review under the law,” said the Liberal minister during a press conference on Monday, on the sidelines of the Farnborough International Air Show in the United Kingdom.
He is participating in this event, which runs until Friday, along with his colleague from Transport, Pablo Rodriguez.
The ICA, which regulates foreign investment, is described as a law allowing Ottawa to review “significant acquisitions of control of Canadian businesses based on their net benefit to the Canadian economy.”
Mr. Rodriguez said he met the head of Héroux-Devtek at the international trade show.
PHOTO SPENCER COLBY, THE CANADIAN PRESS
Canadian Transport Minister Pablo Rodriguez
Obviously, it’s a business decision. But I told him that as a Quebecer, this transaction meant something to me. But he explained to us the reason for what he did. It’s a business decision.
Pablo Rodriguez, Minister of Transport of Canada
At the time the transaction was announced, the office of Quebec Minister of Economy, Innovation and Energy Pierre Fitzgibbon said it was disappointed that the company was coming under foreign control.
Asked Monday how the federal government could prevent the future purchase of other Canadian flagships by companies from outside the country, Mr. Champagne said that Canada “already has a good toolbox when it comes to protecting Canadian companies.”
Having foreign investment in an open economy like Canada is also normal, he says. We have to find the right balance between attracting investment to our country and at the same time protecting flagships.
“This is a discussion we are also having with the Quebec government. Mr. Fitzgibbon and I talked about this; how we can ensure that we have an ecosystem that promotes, advances and protects our Quebec jewels,” added the minister.
The transaction between the manufacturer and the investment fund is expected to close before the end of the company’s current fiscal year, March 31, 2025. It is subject to customary closing conditions, including regulatory and shareholder approvals.
Under the agreement with Platinum Equity, Héroux-Devtek’s headquarters will remain in Longueuil and its other activities, including its research and development centre in Saint-Hubert, will also remain in Quebec.
The Quebec company also has facilities in Montreal and Laval, Ontario, the United States, the United Kingdom, and Spain. In total, it has 1,800 employees.