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Canada Rejects U.S. Arms Maker Bid For Space Unit

Industry Minister Jim Prentice confirmed Minnesota-based Alliant Techsystems’ $1.3 billion bid for the country’s biggest space tech firm was rejected.

TORONTO (AP) -- Canada has rejected a proposed $1.3 billion (euro820 million) sale of a division of the country's biggest space technology firm to an American arms maker.
 
Industry Minister Jim Prentice confirmed Thursday that Minnesota-based Alliant Techsystems Inc. was notified that its bid for the space division at MacDonald, Dettwiler and Associates Ltd. was unsatisfactory.
 
''On the basis of the information contained in your application and other information I have about your investment, I am not satisfied that your investment is likely to be of net benefit to Canada,'' Prentice wrote in a letter.
 
MDA is the builder of Canadarm, the robotic limb used on the space shuttle and on the International Space Station, as well as Dextre robotics and the Radarsat 2 satellite, a remote-sensing satellite that allows observation of Canada's Arctic.
 
Prentice was not specific in the three-paragraph letter about what in the bid he saw as deficient.
 
Prime Minister Stephen Harper noted in parliament Thursday that the government has never turned down a single foreign takeover.
 
''No one should doubt the determination of this minister or this government to protect this country's interests,'' said Harper.
 
Alliant, a major U.S. defense contractor, has 30 days to alter its bid.
 
An Alliant spokesman said in an e-mail that ''the bottom line is the process continues.'' Company officials are expected to be in Ottawa next week.
 
Opponents criticized the deal when it was announced in January, citing a threat to Canada's Arctic sovereignty, the transfer of advanced security technology to the U.S. and because it would carve up Canada's domestic space industry.
 
The most valued asset in the sale is Radarsat 2, which represents at least a $438 million (euro275.9 million) taxpayer investment and decades of intellectual property development. It is also this asset that has security and sovereignty experts up in arms. Although the Canadian government has firm contractual rights on Radarsat's data for the seven-year life of the satellite -- launched in December -- strict U.S. security laws could trump Canadian control.
 
Moreover, Alliant has acknowledged that it wants to build subsequent generations of satellites using MDA technology, and those satellites would be firmly under U.S. legal control.
 
Marc Garneau, the first Canadian in space and former head of the Canadian Space Agency, told CTV's ''Canada AM'' on Thursday that the government made the right decision.
 
He said taxpayers have helped build the Vancouver, British Columbia company, and if MDA's technology, expertise and intellectual property were sold to the United States, Canadians would have to rebuild a capability that took decades to achieve.
 
MDA has dominated Canada's space technology field in recent years, winning more than 50 percent of all contracts awarded by the Canadian Space Agency.
 
The company's president, Daniel Friedman, has insisted that MDA owes its success to contracts from the U.S. space program, and that only a U.S. owner could ensure that access.
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