Executives question report on foreign buys

Mon Jan 28, 2008 5:20pm EST
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By Jonathan Spicer

TORONTO (Reuters) - A panel of Canadian business leaders slammed a report on Monday that suggested a wave of foreign takeovers of Canadian corporations provided a net benefit for the country.

The report, by the Conference Board of Canada, sought to debunk concerns over a "hollowing out" of corporate Canada following high profile takeovers in the last few years of blue chip names such as Inco and Falconbridge.

It said the big infusions of capital from the takeovers benefit the operations and shareholders of the targets companies, and warned that any new rules on foreign direct investment would be harmful to the country.

But a panel of executives that the Conference Board assembled in Toronto to discuss the report's findings had other ideas.

"There's a total absence of any passion, all of it is numbers," said Dominic D'Alessandro, chief executive of Manulife Financial (MFC.TO: Quote), Canada's biggest insurer and an aggressive buyer of foreign assets.

"There's something wrong when you have too few leaders. Every country needs its heroes, and I think Canadians are poorly served by the point of view that says, 'It doesn't matter'."

Goldcorp (G.TO: Quote) Chairman Ian Telfer called the loss of nickel producers Inco and Falconbridge -- to Brazil's Vale (VALE5.SA: Quote) (RIO.N: Quote) and Anglo-Swiss Xstrata XTA.L respectively -- "a shame," and lamented the loss of Canada's global mining reputation.

"I don't think anyone should be allowed to take over a Canadian company if they themselves can't be taken over," Telfer said of the C$19.35 billion buyout by Vale, previously known as CVRD, in which the Brazilian government has a golden share.   Continued...