The Canadian government has reaffirmed its rejection of MacDonald, Dettwiler and Associates plans to sell its space division to American defense contractor Alliant Technosystems (ATK).
Ottawa rejected the $1.3 billion sale last month as not being of net benefit to Canada. MDA had 30 days to convince Industry Minister Jim Prentice to reverse the decision. That period expired on Thursday.
Prentice did announce a four-year, $109-million contract between the Canadian Space Agency and MDA. However, company officials said this was merely a renewal of a long-standing contract that did nothing to provide direction to a drifting Canadian space program, the Vancouver Sun reported.
“The space file in Canada has been neglected for quite a while,” said Mag Iskander, MDA’s executive vice-president for information systems. “In real terms, government expenditures in this space have been declining. We are hoping with this new resurgence of interest by the minister and the government they will engage in a serious long-term space plan, similar to what we had in the past.
“I am not talking about handouts. I’m talking about contracts that meet the needs of Canadians,” Iskander said.
MacDonald Dettwiler and Associates has warned that the Canadian government’s decision to block the sale of its space division to an American defense contractor Alliant Technosystems could backfire, resulting in the loss of jobs and key technologies, the Financial Post reports.
MDA wants to sell its space division to ATK for $1.3 billion in order to focus on its fast growing real-estate information business. If the sale does not go through, company officials say they would have three options:
- purchase an American-based company to gain access to the U.S. market, draining funds from its information business;
- hire hundreds of American workers so it can gain access to U.S. contracts, thus sending jobs south of the border;
- collaborate with a U.S. company, with the risk of having its technologies stolen.
Last month, Industry Minister Jim Prentice rejected the sale on the grounds that it would have no net benefit for Canada. He sided with critics who say that the sale would damage the nation’s space program, sell off taxpayer-funded technology to the United States, and possibly block Canadian access to data from the Radarsat 2 satellite.
Continue reading ‘MDA Warns of Job and Technology Losses; Critics Decry Lack of Space Vision’
A key parliamentary committee issued a report on Thursday supporting the Canadian government’s decision to reject the sale of MacDonald Dettwiler and Associates’ space assets to American defense Contract Alliant Technosystems, the Globe and Mail reports.
“The report, tabled yesterday by the Standing Committee on Industry, Science and Technology and the result of hearings held last month to scrutinize the sale, comes as another blow to a deal already widely seen as on death’s door. Nonetheless, Richmond-based MDA is lobbying Ottawa for a chance to plead its case for the $1.3-billion transaction.”
The report is expected to bolster the decision by Industry Minister Jim Prentice to reject the proposed sale on the grounds that it did not provide “net benefits” to Canada. MDA wants to use profits from the $1.3 billion sale to continue expanding its rapidly-expanding information products business.
Shares of MacDonald, Dettwiler and Associates fell sharply on the Toronto Stock Exchange on Thursday after the Canadian government signaled that it would block the company’s sale of its space division to an American defense contractor.
Shares of the Richmond, BC-based company, which had been trading at a high of $47 Canadian on Wednesday, fell to $42.85 Canadian on Thursday after Industry Minister Jim Prentice indicated that the”investment is not likely to be of net benefit to Canada.” The stock recovered slight to finish the week at $43.03 Canadian.
MDA had planned to sell its space division to U.S.-based Alliant Techsystems (ATK) for $1.325 billion in order to focus on its information systems business. Stockholders overwhelmingly approved the sale last month.
However, opponents said the sale would devastate the Canadian space industry, give Americans access to taxpayer-subsidized technology, and compromise the nation’s sovereignty. MDA built the Canadarms and the Dextre robot for the space shuttle and International Space Station, both funded by the Canadian government.
Continue reading ‘MDA Stock Falls Sharply as Canadian Government Rejects Sale’