MDA Gets 4-Year Deal For International Space Station

After blocking a takeover of part of MacDonald Dettwiler and Associates, federal Industry Minister announced a major contract between the company and the Canadian Space Agency.

LONGUEUIL, Quebec (CP) -- Only hours after confirming his decision to block a controversial foreign takeover of part of MacDonald Dettwiler and Associates Ltd., federal Industry Miniser Jim Prentice announced a major contract Friday between the company and the Canadian Space Agency.

In a speech at the Canadian Space Agency in the Montreal area, Prentice said the government has awarded a four-year $109 million contract extension for the Vancouver company, also known as MDA.

Under the deal, MDA will continue to provide logistics and engineering and technology services for the Canadian-made Mobile Servicing System on the International Space Station.

The announcement came a few hours after Prentice announced his decision to block the sale of MDA's space division, which includes the Radarsat satellite, saying the proposed deal would not benefit the country.

''I have confirmed my initial decision that I am not satisfied that ATK's proposed acquisition of the Information Systems Business of MDA would likely be of net benefit to Canada,'' Prentice said in a news release early Friday.

Prentice first turned down the $1.3 billion takeover bid last month for MDA's space division by Alliant Techsystems Inc., a U.S.-based munitions and rocket component maker. Alliant had 30 days to appeal the decision and the deadline passed Thursday.

MDA is the maker of the state-of-the-art Radarsat 2 satellite which monitors Canada's Arctic sovereignty. The company also designed and built the iconic Canadarm and Dextre robotics for the International Space Station.

The proposed sale of MDA's taxpayer-subsidized space division to ATK caused a storm of controversy. Critics, including prominent voices from Canada's scientific and engineering communities, said Canada would be losing intellectual property that took decades to develop while casting into doubt government control over satellite images that are critical to maintaining Arctic sovereignty.

Alliant and MDA had argued that the sale of the space unit would give the division access to more lucrative contracts, especially in the United States.

MDA planned to use part of the money to boost its other major business -- specialized land and property data it sells to real estate, government and other customers around the world.

The company is expected to provide more information on its future plans when it meets with shareholders at the annual meeting later Friday in Vancouver.

Prentice said earlier this week in Washington that he anticipated MDA would continue to be part of Canada's ''vibrant space program.''

This is the first time the federal government had rejected a foreign takeover outright in the 19 years since the Canada Investment Act came into effect in 1989.

''Foreign investment plays an important role in the Canadian economy,'' Prentice said Friday, adding that foreign investors bring with them capital, knowledge, capabilities and technology that can increase the productivity, efficiency and competitiveness of Canadian firms.

''However, where a significant transaction does not demonstrate net benefit to Canada, it cannot be approved under the Investment Canada Act,'' he said.

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