10 LEXPERT
|
2018
|
WWW.LEXPERT.CA
NAFTA UNCERTAINTY
ARE THE NAFTA TALKS
CHILLING M&A ACTIVITY?
NOT AT ALL, ACCORDING
TO DEAL LAWYERS, WHO
SAY ACQUIRERS ARE
TAKING ADVANTAGE
OF PLENTIFUL LIQUIDITY
AND A TAX-CUT WINDFALL
BY JOHN GREENWOOD
Worries
for Another Day
THE NORTH AMERICAN Free Trade Agreement has been
a key economic driver for Canada and the entire North American
continent. US President Donald Trump, however, is calling it "the
worst trade deal ever made" and threatening to tear it up. Is this
just bluster, or do we, as Canadians, need to take it seriously? e
question isn't as simple as it seems. e comments, for one, have not
dampened an M&A market that can only be described as frothy.
Many M&A lawyers say they're too busy getting deals done to spend
time speculating on how things might settle out.
But at the same time, some lawyers admits that, in the event of a
worst-case scenario, the outlook for many Canadian companies would
likely be harsh. "If NAFTA gets torn up and is not replaced, there's go-
ing to be an impact," says Brian Graves, a partner at Fasken Martineau
DuMoulin LLP with a focus on M&A. "Given the amount of trade
Canada has with the US, it's an enormous proportion of our interna-
tional trade and it just cuts across so many industries."
Melanie Shishler, a partner at Davies Ward Phillips & Vineberg
LLP who also practises M&A, puts it this way: "In general, any kind
of uncertainty, including uncertainty around NAFTA can be ex-
pected to create some headwinds." e US is by far Canada's largest
trading partner, so even if a Canadian company isn't directly affect-
ed by NAFTA, it likely trades with others that are.
But at the same time, down in the trenches of M&A, the impact
of NAFTA uncertainty on deal activity seems minimal. Equity val-
ues are soaring, cash is plentiful and investors are upbeat. For many
PHOTO:
SHUTTERSTOCK
