The urge to merge_TOstar_Aug_2006

The urge to merge_TOstar_Aug_2006 - Theurgetomerge...

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The urge to merge Aug. 6, 2006. 08:40 AM SHARDA PRASHAD Toronto Star  T hey are Canadian icons, their history woven into the fabric of this country's economy, labour law and  environmental legacy, and now they are for sale. Inco, the mining giant that grew out of a nickel-rich  hole in the ground in Sudbury, is being courted by two suitors — one Canadian, the other American.  Falconbridge, Inco's rival, seems all but certain to fall into foreign hands, with a tempting offer by  Switzerland's Xstrata on the table.  Whenever a Canadian company is "in play," the debate resurfaces: How important is it for our country  to keep Canadian companies in Canadian hands? In the case of Inco and Falconbridge, it's not just  about preserving Canadian ownership of one or two companies, but also about preserving an entire  industry. Some argue such "protectionism" is crucial for Canadian business and industry; for others,  it's not.  "There's a time to be a hard-nosed business person who wants to be financially successful today,"  says Ken Wong, marketing professor at Queen's School of Business. "But that isn't (necessarily) good  for the long-term . .. Sometimes business has to be subservient to the public interest." Canada's natural  resource and telecommunications sectors are core assets that should be protected, argues Wong.  Corporations, he adds, do not outsource core competencies because they don't want to tie their future  to someone else's hand.  In Canada, one in five companies has a foreign owner, according to the latest Statistics Canada data.  Among the benefits of protecting certain industries from foreign ownership are efficiency of operations,  national security and preservation of national culture. The argument for having a head office in Canada  is also familiar: If CEOs are located in head offices in Canada, they will be more likely to make  decisions that will help the Canadian economy. Job cuts will be in other countries, research and  development will remain, profits will stay in the country.  But are these perceived benefits real? Companies, after all, don't merge to harm another country's 
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This note was uploaded on 04/06/2010 for the course LAPS ADMS 1000 taught by Professor Lastry during the Winter '10 term at York University.

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The urge to merge_TOstar_Aug_2006 - Theurgetomerge...

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