Lexpert Magazine

34 LEXPERT MAGAZINE | JANUARY 2013 TOP 10 DEALS 2012 China National Offshore Oil Corporation (CNOOC) that the federal government's various trade treaties and professions of love for China notwithstanding, its $15.1-bil- lion bid for Calgary-based Nexen Inc. was not going to be a regulatory cakewalk either. "For better or worse, the Canadian gov- ernment has put itself on the map," says Torys LLP's Sharon Geraghty. "It was not that long ago that Canadian regulatory risk was a small blip on the horizon." In 2012, it defined the year. Experienced buyers tackled the spec- tre of Canadian regulatory risk head-on. Anglo-Swiss giant Glencore International plc effectively neutralized its Investment Canada risk by structuring its acquisition of Viterra Inc. in such a way that about half of Viterra's assets stayed in Canadian hands. Ironically, it apparently didn't plan as well for the Chinese regulatory deal risk (see below for details) ... perfectly correlated, those in the know say, to the Canadian reg- ulatory risk faced by CNOOC. CNOOC made all sorts of commitments in its Nexen bid clearly intended to reassure Investment Canada, such as keeping management in Canada, making Calgary its North Ameri- can headquarters, and maintaining its TSX listing. Others – like the unfortunate PETRONAS – were caught off guard with how long it took to get its eventual approval. (Or, as some have it, they were victims of Ottawa's need to pronounce on CNOOC and dra SOE-acquisition policy before approving any other SOE deals.) When the regulators weren't putting would-be-dealmakers through the wringer, they were pronouncing on increasingly frequent and fractious conflicts between corporations and their shareholders. From the dramatic reshaping of Canadian Pacific Railway's board and management by Per- shing Square Capital Management to the ongoing fisticuffs between Telus Corpora- tion and Mason Capital Corp., 2012 was also the year of the activist – downright uppity, really – shareholder. It wasn't just hedge funds and institutional investors that were uppity either, points out Davies partner Melanie Shisher. Vancouver-based mining company Roxgold Inc. found itself in a proxy contest launched by an individual shareholder, Oliver Lennox-King — whose challenge (with the legal weight of a Davies team behind him) was successful. e lesson of 2012 to Corporate Canada: keep your enemies close ... and your share- holders closer. For law firms, the year's trends high- lighted that a diversified practice base was a darn good thing. As Blake, Cassels & Graydon LLP's Jeffrey Lloyd points out, "Although the number of deals was down compared to last year, the significant deals that did get done were in a relatively wide range of industries." In contrast to 2011, when mining deals dominated the head- lines and law firm books, 2012 was compar- atively quiet on the mining front, making deals in the industry – like the $3.4-bil- lion acquisition of Quadra FNX Mining Ltd. by KGHM Polska Miedź S.A. or the resolution of the Rio Tinto-Ivanhoe Mines drama – all the more noticeable. "What's old is new again in 2012 with the return to prominence of non-resource deals," says Davies' Peter Hong. "We have some solid pieces of the Canadian economy represented in deal activity this year." Calgary's oil patch wasn't on fire either, despite half a handful of mega-deals like Pem- bina Pipeline Corp.'s $3.16-billion acquisi- tion of Provident Energy Ltd., the difficult PETRONAS-Progress bid, and the massive CNOOC play for Nexen. In Ontario, while pension funds, banks and other institutional "usual suspects" sent some work lawyers' way, Bay Street was pretty quiet too. Fortunately for national law firms, Quebec Inc. was hot, hot, hot. "Between Europe's low valuations, a strong Canadian dollar and cheap capital from Canadian well-endowed pension funds and well-capitalized banks, Quebec issuers went on a buying spree," says Stikeman Elliott LLP's Benoît Dubord. Osler Hoskin & Harcourt LLP's Robert Yalden agrees, "Quebec saw more action in 2012 than it has in some time and closed the year out having been one of the busiest parts of Canada's M&A landscape." Deals of note included another ambitious global EDITOR'S NOTE: ABOUT THE PROCESS > The deal must be announced between Nov. 1, 2011, and Nov. 1, 2012, and closed or expected to close early in 2012, preferably by January 2012. Transactions with particularly long gestation periods, such as the Rio Tinto/Ivanhoe or Maple/TMX sagas also qualify. > Canadian legal content of the deal must be significant. > Most importantly, the deal must stand for more than itself: represent a trend, illustrate some aspect of the year's economic climate, or be a portent of things to come. > There is no minimum size or preferred structure — this list's definition of "deal" is anything Canadian lawyers worked on that they considered to be significant. Lexpert also co-sponsors, with Deloitte, The Globe and Mail and Thomson Reuters (Markets), the Canadian Dealmaker Awards. We will report on these Awards in the March issue of the magazine, at which time it will be interesting to compare the winners with the Lexpert Top Deals. Certain of the deals are bound to overlap, while others do not. Top Deals tends more toward "lawyers' deals" in the sense that they comprise compelling legal issues. Clients aren't nearly as interested in compelling legal issues as lawyers are. LEXPERT'S TOP 10 DEALS OF THE YEAR LIST, PUBLISHED ANNUALLY SINCE JANUARY 2004, IS UNIQUE AND DISTINCT FROM LEAGUE TABLES PREPARED BY ACCOUNTANTS, INVESTMENT BANKS AND FINANCIAL ANALYSTS, AND RANKED, FOR THE MOST PART, BY SIZE OF THE TRANSACTION. THIS LIST IS BASED ON AN EXTENSIVE CANVASS CONDUCTED IN OCTOBER AND NOVEMBER 2012 BY MARZENA CZARNECKA OF CANADIAN M&A, SECURITIES AND CORPORATE FINANCE LAWYERS. THE CRITERIA THIS YEAR INCLUDED: If you would like to offer feedback on the selection process, please e-mail Jean Cumming at jean.cumming@thomsonreuters.com.

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