is an Opportunity for Public Interest Review of
of the Canadian Auto Workers union responded today to the announcement by INCO
and Falconbridge that the closing date for their proposed merger has been
extended to June 30, as a result of continuing investigations by U.S. and
European competition authorities.
proposed mega-merger is still very much up in the air,” said Rick Grylls,
president of Mine Mill 598/CAW, representing Falconbridge members at mining,
milling and smelting operations in the Sudbury area.
repeated extensions of the closing date indicate this merger faces significant
hurdles, from both regulators and investors.”
long extension raises major questions as to whether the merger will in fact
proceed. Swiss-based Xstrata will
now have an opportunity to submit a competing offer for Falconbridge, with the
expiry in May of its agreement with Brookfield Asset Management (formerly
Brascan) to match the price of any subsequent Xstrata purchases of Falconbridge
shares. Bids from other potential
suitors (including Teck Cominco) are also possible – for either Falconbridge,
or for the combination of INCO and Falconbridge. The fact that Falconbridge shares are trading for significantly more than the $34 INCO offer, suggests that
investors are expecting further bids.
CAW has called for a comprehensive review of the public interest impacts of any
merger involving INCO or Falconbridge, before it is allowed to proceed.
“A merger will have both costs and benefits for Canadians,” Grylls continued.
“It is essential for all stakeholders, including government, labour, and municipalities, to participate in
developing a clear plan that sets binding targets to make sure that any merger
respects the interests of Canadians.”
Belt MP Ray Bonin attended the Mine Mill 598’s INCO/Falconbridge merger public
forum on February 15th and stated that city council and all
stakeholders should have a meeting to review the long term security of the
The CAW would welcome such an initiative.
can’t simply trust any of these huge companies to do the right thing for
Sudbury, or for Canada.
We have to hold them accountable.”
called on Canadian regulatory authorities to play a more active role in
reviewing the impact of any proposed merger.
“It is embarrassing that this mega-merger between two purportedly Canadian companies is receiving a more
thorough review from foreign regulators, than from our own regulators.”
particular, Grylls called on the Investment Review branch of Industry Canada to
look seriously at the implications of an INCO-Falconbridge merger for foreign
INCO is majority owned by foreign investors, mostly U.S.-based. The
CAW has also asked provincial and federal governments to review the merger more
carefully, and make approval for the merger (or for subsequent development
projects) contingent on commitments by the merged company to specific targets
for Canadian investment, employment, and purchases.
has been some speculation about the impact of an INCO-Falconbridge merger on
labour relations – most recently in the form of extensive published comments by
leaders of the United Steelworkers of America (which has endorsed INCO’s
proposed takeover) indicating that union’s desire to represent all workers at a
whole takeover process is completely uncertain,” said Grylls.
“The financial wheeling and dealings are just getting started.”
of jumping on the bandwagon of any particular takeover bid, we should all work
together to win as much protection for jobs and investments in Sudbury as we
the event that a merger results in representation elections for workers at INCO
and/or Falconbridge (a situation that will not likely occur until later in
2007, at the earliest), Grylls said he was confident that Canadian workers in
the mines, mills, and smelters would choose a Canadian union to represent them. “But
it’s premature and counterproductive to start that battle now, with such an
important decision regarding our economic future completely up in the air.”
union official who starts to dream about capturing new members is missing the
more important question, which is how to hold all of these investors
accountable to the Canadian public interest.”
further comment, Rick Grylls, 705-673-3661, ext 23 or 705-665-2138
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