Governments get it right when they don’t intervene with foreign takeovers except when it’s for legitimate concerns about national security. The track record of government involvement in foreign investment transactions shows a distressing lack of business acumen, encouraging foreign asset purchases at their peak while blocking once-in-a-lifetime selling opportunities.
The historian Michael Bliss pointed out that the National Energy Program prodded Canadians to buy foreign oil companies at their highest price of the century, making foreign capitalists the primary beneficiaries of our misguided nationalism. More recently, following a wave of foreign purchases of Canadian natural resource companies in the early 2000s, the federal government blocked BHP Billiton’s $39-billion bid for Potash Corp. in 2010. Then shareholders watched as Potash’s stock price tumbled from $130 to $17, costing them $33.9 billion.
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