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seller. In 2009, one of the SOEs McCarthy Tétrault LLP acted for showed that to be wrong when Wuhan Iron and Steel (Group) Corp. acquired Canadian mining and exploration company Consolidated Thompson Iron Mines Ltd. for a $240-million investment. WISCO acquired Consolidated Thompson as a minority shareholder at the public company level and also 25 per cent at the project level so the whole deal was done for $250 million for both chunks of investment. Two years later, Cliffs Natural Resources wanted to buy Consolidated Thompson and launched a takeover bid. WISCO sold its 19.9-per-cent investment in Consolidated Thompson for almost $1 billion. "They made four-fold return and are still keeping the underlying joint venture interest of 25 per cent," says Joyce Lee, a partner in the business law group with McCarthy Tétrault in Vancouver. "That demonstrates that the Chinese have now matured and they are more like market players from a pure investment perspective and they will sell at the right time." She says the reason Consolidated Thompson was seen as attractive to Cliffs was partly because WISCO was the major JV partner in the deal. "Cliffs, like others, wants to break open the Chinese market," she says. So while some Canadian companies think Chinese investors aren't interested in selling, WISCO demonstrates that myth to be wrong. With CNOOC and Nexen there is also a theme that they are not interested only in the raw materials but also in the management team."The Chinese are maturing from 'we must control everything' to knowing if they want to play meaningfully in the global platform maybe one of the ways to do it is to have people with Western management skills and experience," says Lee. From his office in Calgary, Hoskins says he sees more interest from Chinese investors in commercial and residential real estate development and in agricultural land in Alberta and Saskatchewan. financial reformS Policy changes in China with respect to personal investment rules will fuel the next wave of investment in Canada, says Hoskins. "China just went through a change of government this past year and the new premier is quite focused on implementing a lot of financial reforms, which effectively make it easier for private Chinese companies to finance wherewithal to invest overseas. "We're seeing some of that now," he says. "Given what's happening with Chinese domestic policy it is translating into five million new middle class Chinese citizens every year as a result of reforms and urbanization." Norton Rose Fulbright Canada is acting for some Chinese companies to establish their business here rather than acquiring a big existing business in Canada. One of the firm's partners in Toronto is working with investment bankers who are developing relationships in China with "high net worth individuals" to assist them in sourcing investment opportunities in Canada. Although China's economy is slowing somewhat and there are concerns the boom in some of the country's cities has waned significantly, there is still considerable A lot of the deals we do wouldn't make the newspaper. That said there is wariness after the Nexen deal in terms of all the new rules of the government in terms of how they will be applied. We haven't seen any deals like that since then. DAVID lEFEBVrE, Gowling Lafleur Henderson LLP themselves in a more competitive way within China and then to use that ability to get more financing." There are other reforms afoot with respect to foreign investment on the horizon that will make it easier for private Chinese companies to have the wealth creation taking place overall. It is expected the liberalization of financial policies will continue to grow direct investment from private investors from China. "Everybody knows the Chinese economy is cooling but I'm personally very bullish on China," says We had a spark right from the beginning. Your lawyer. Your law firm. Your business advisor. Untitled-4 1 w w w. c a n a d i a n law y er m a g . c o m / i n h o u s e october 13-02-26 10:2523 2013 • AM

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