The sale of Future Electronics, owned by controversial Montreal billionaire Robert Miller, risks being a delicate issue for Ottawa. This Quebec flagship revolves around a sector considered increasingly strategic – electronic components – and its buyer belongs in part to Chinese interests.
This foreign takeover, one of the largest to occur in recent years in Quebec with a bill of 5.14 billion, did not spark an outcry, as has often been the case in the past. The Legault and Trudeau governments were rather cautious on Friday.
In Ottawa, we limited ourselves to reminding that there will be an examination under the Investment Canada Act (LIC), a mechanism allowing federal authorities to block a sale.
“We are closely monitoring the transaction concerning Future Electronics,” insisted Laurie Bouchard, spokesperson for the federal Minister of Innovation, Science and Industry, François-Philippe Champagne.
For its part, the Ministry of Economy, Innovation and Energy indicated that it had never been contacted by Future Electronics. He added that he was willing to “support strategic businesses” in the province and that this message had been communicated to Robert Miller’s business. Quebec asserts that it is up to the federal authorities to play their role through the LIC.
This file has several particularities.
The founder and largest shareholder of Future Electronics, Mr. Miller is facing charges related to child prostitution, which set the stage for the sale process. Present in more than 47 countries, the Pointe-Claire company does not manufacture electronic components such as chips, semiconductors and other modules, but it plays a role in this ecosystem by being among the main distributors in the world.
The actions of which Robert Miller is accused
In a report from the show Investigation broadcast last February, around ten women confided having had sex for money with the billionaire between 1994 and 2006. Since then, other women have claimed to have had a similar experience. A request for class action and two individual lawsuits were also filed at the Montreal courthouse. Mr. Miller denies the allegations and says they are repeated for financial gain by some people.
The buyer, WT Microelectronics, is based in Taiwan, where the geopolitical climate is tense because of the Chinese threat. The Middle Kingdom is increasing military exercises near the island which it considers part of its territory, suggesting a possible military conflict.
In addition, according to financial data firm Refinitiv, two Chinese shareholders are among the main owners of the Taiwanese multinational. These are the Shao Yang Investment firm and the Industrial and Commercial Bank of China. Together, these organizations own approximately 11% of WT Microelectronics shares.
“It is not clear that this signals that WT is a foreign state-owned company, but it is not impossible that it could have an influence [dans l’évaluation d’Ottawa] “, says lawyer Mark Warner, regulatory law specialist at the Toronto firm Maaw Law.
Multiple angles
It was not possible to know on Friday whether an evaluation file had already been sent to Ottawa. Mme Bouchard did not want to give details on this subject.
The transaction can be evaluated from two angles: “net benefit” as well as “national security”. Given the price paid for Future Electronics, we will certainly evaluate the effects on jobs and the economy, says Mr. Warner. When it comes to national security, the lawyer is less certain.
At first glance, the distribution of electronic components does not appear to be one of the “sensitive technological areas” identified by Ottawa. These include, for example, artificial intelligence, aeronautics, next-generation computing, and advanced materials and manufacturing.
It is not clear that Future Electronics fits into the national security aspect, but by studying the file, the government can find something related to it.
Mark Warner, regulatory lawyer at Toronto firm Maaw Law
The expert recalls that last December, the Trudeau government expressed its intention to strengthen the ICA in order to give itself more tools and power to block a transaction if it presents risks to national security. This could prompt federal authorities to further scrutinize the purchase of Future Electronics, Mr. Warner points out.
At the Technum Québec innovation zone in digital technologies, president and director Normand Bourbonnais believes that Ottawa could look into the transaction. The trained engineer, however, believes that it is “good news” to see WT Microelectronics grow by purchasing the Quebec company.
“The Taiwanese have a good understanding of what’s happening with the relocation of supply chains for semiconductors,” he says. We had global chains and local manufacturers. Manufacturers are going global to serve chains that want to regionalize. »
Mr. Bourbonnais emphasizes that the distributor founded by the Quebec businessman is “extremely important for many people”, in addition to being a “supplier certified by the manufacturers”.
If the transaction is concluded, WT Microelectronics affirms that Future Electronics will retain its head office in Pointe-Claire and that its management team will remain in place.
Future Electronics in brief
Founded: 1968
Main shareholder: Robert Miller
Revenue*: 3.9 billion
Net profits: 249 million
Workforce: 5,200 people
* For the first six months of 2023
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- 1993
- Founding year of WT Microelectronics
Source: WT Microelectronics
- 24 billion US
- Taiwan company revenue in 2022
Source: WT Microelectronics