(In U.S. dollars)
VANCOUVER, British Columbia, May 9 (Reuters) - As protests
mount in Canada over a spate of foreign takeovers of some of
the country's biggest companies, a study showed on Wednesday
that Canadian firms have been on a buying spree of their own
overseas.
An analysis by KPMG's corporate finance practice in Canada
shows that there were 790 foreign acquisitions by Canadian
firms through 2005 and 2006. That compares with 660 foreign
acquisitions of Canadian companies in the same period.
"Despite the perception that Canada is up for sale, there
is significant deal flow going both ways," said Peter Hatges, a
partner in KPMG's Canadian corporate finance operation.
In dollar value, however, acquisition of Canadian companies
by foreigners almost doubled the value of Canadian purchases
abroad.
Foreign acquisitions by Canadian firms in 2005 and 2006
were worth about $51 billion, KPMG said, using data supplied by
Thomson Financial Securities.
Foreign acquisitions of Canadian companies were worth $99
billion, with $38 billion of that coming from just two deals:
the purchases of nickel producers Inco and Falconbridge.
"We're not surprised by the statistics. As Canadian
companies mature to the point where they are world class
players, they are getting world class attention, and typically,
the most appropriate suitor will be a foreign buyer," Hatges
said in a statement.
"Furthermore growing and emerging Canadian companies are
being very active in cross border transactions. Despite the
fact that the overall outbound deal values are smaller, the
outbound deal activity is 20 percent greater than inbound deal
activity."
The KPMG analysis comes in a week when U.S.-based Alcoa
(AA.N) said it would make a hostile bid for Alcan Inc. AL.TO,
one of Canada's oldest and biggest companies. The nearly $27
billion bid would create the world's biggest aluminum
producer.
The news prompted Canada's opposition Liberal and New
Democratic parties to step up pressure on the minority
Conservative government to review foreign investment rules to
protest against job losses and help Canadian companies compete
abroad.
Canada's finance minister brushed off the demands and
pointed to Canadian publisher Thomson Corp.'s TOC.TO planned
$17 billion purchase of Reuters Group Plc. RTR.L, also
announced this week, as evidence that Canadian firms are
internationally competitive and in no need of protection.
