After what was pretty much a done deal, the Canadian government has halted Naguib Sawiris' acquisition of a fibre optic network, citing 'national security' concerns.
In a surprising move, the conservative Canadian government decided on Monday to block a bid by Egyptian telecom tycoon Naguib Sawiris to buy a Canadian fibre optic network. The Canadian government gave very little explanation why they were blocking the acquisition, only citing that it has to do with ‘national security’.
The agreement to take Allstream fibre optic network from Manitoba Telecom Services (MTS) to Accelero Capital Holdings, which is controlled by Sawiris, was made in May of this year, for C$520 million.
"Throughout this process, we were comforted by Industry Canada that our filings were in order, our submissions complete and constructive, and our proposed binding undertakings serious and substantive so that the transaction would meet the 'net benefit' test," Sawiris argues.
The deal was as good as done, until the Canadian government stepped in. Both MTS and Accelero offered to take necessary action to address the unspecified national security concerns, but were once again rejected. "We are disappointed by the Government of Canada's unfounded and unexpected decision," Sawiris explains.
Sawiris has faced nothing but obstacles since introducing Wind Mobile, the first foreign telecom service in Canada. As for speculating why the Harper administration blocked this deal, which is super rare to do, is still unclear but we are guessing that crisis in Egypt didn't help Sawiris’ case.