Cross-border deals: Be careful what you wish for

The challenges for general counsel are immense, writes Tim Wilbur

Tim Wilbur
Editor's Desk

Canada is hot. While Canadians can justifiably be accused of being smug at times, when it comes to foreign investment, we have reason to be proud. 

For corporate counsel in Canada and the law firms that advise them, the activity is happening on many fronts. Foreign investors, mostly from the U.S. but increasingly from all over the world, see Canada as a safe bet. Foreign companies with a Canadian presence are growing, too. 

While this is a good news story for the Canadian economy, for general counsel in Canada, it can be a case of “be careful what you wish for.” The challenges for lawyers in this role are immense. 

As Robert Soccio, general counsel at Navistar, told us:, any sort of cross-border transaction that involves one or more jurisdictions puts a lot of pressure on tax teams, legal teams, accounting teams and internal business groups. And GCs are most often the ones who navigate this complicated internal and external web of stakeholders to ensure things run smoothly. 

GCs based in Canada can often identify red flags, like when a foreign acquiror wants to use acquisition documents that are not acceptable in Canada or when foreign headquarters fail to understand the subtle cultural differences that can affect the success of a deal. 

And it isn’t only during an acquisition that things can go wrong. Often, after the dirt settles and the transaction is done, the troubles can still linger. Integrating the acquired business into the purchasing company can be daunting and can cause many headaches for GCs after the external law firms have left and docketed all their time. 

So, while Canadians are justified in feeling pride about all the interest our market is generating outside our borders, this is no time for anyone, especially GCs, to be complacent. With cross-border deals, things are highly complex and never settled. 

However, no one is better placed to manage the risk and take much of the credit for a successful cross-border deal. The world is interested in Canada. This is cause for celebration. But it is also just the beginning of a long and difficult process that general counsel are best equipped to navigate. 

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