Face it, Canadians have historically tended to put a North American veneer on globalization. It used to be a global deal was a U.S. company and its Canadian subsidiary shopping in Europe, Asia or South Africa. OK, maybe a U.K. or European company doing the acquiring. China? Never. Not before 2000, anyhow.

Thomas Friedman writes in The World Is Flat: A Brief History of the 21st Century that the new version of globalization will be driven by a “much more diverse — non-Western, non-white group of individuals.”

Read: China, India, Brazil and assorted non-traditional European players. He calls it Globalization 3.0, and nowhere are the early effects more evident than the Canadian resource sector.

Noranda could have gone to the Brazilians or the Chinese. The Russians and Chinese are by no means finished with the oil patch or Canada’s other energy resources. As for the oil sands, it’s not just the U.S. that is eyeing them covetously. France is in the game, too, as evidenced by Total’s $1.67-billion acquisition of the Deer Creek oil sands project.

And while everyone was focusing on the battles for Unocal and then PetroKaz, China’s Sinopec Group quietly acquired a 40% interest in the Northern Lights oil sands project — on the heels of China National Offshore Oil Corp. acquiring a stake in MEG Energy and PetroChina International investing in Enbridge’s Gateway Pipeline.

For Canadian corporate lawyers, the globalization of business is, on the whole, good news.

They learned the game in the cross-border-cum-global-deal universe driven by the United States, learning how to stay relevant to outbound clients and become relevant to inbound clients. If anything, the latter task may become easier. There are more than a few U.S. lawyers who think they can do Canadian law. Chinese lawyers? Not so many.

As shown by the 10 deals identified by Canadian lawyers surveyed by Lexpert as the most exciting corporate deals of 2005, the definition of a “Canadian” deal has changed. For the more pragmatic Bay Street lawyers, so long as they get work, that’s Canadian enough. So let’s have a look at what made the grade.

1. IF I HAD A NICKEL: INCO BIDS $12-BILLION FOR FALCONBRIDGE

For industry insiders and Bay Street aficionados of this suddenly thriving sector, the Inco-Falconbridge deal is The Royal Wedding, and the hefty size is just the icing on the wedding cake.

Each is a long-established Canadian company and together they form the leading nickel producer in the world. “They’ve been obvious merger partners for years,” says Jonathan Levin of Fasken Martineau. Obvious competitors, too.

There was corporate drama galore leading up to the proposed sale to Inco, which we think is one very big deal. Inco, Falconbridge, $12-billion.

Do you need more? OK. Global industry, blindsided Swiss player, betrayed Teck Cominco, there was drama enough for a Sunday night soap. There’s even a notorious private equity player hovering in the background: Xstrata is 40% owned by Glencore International, the baby of fugitive U.S. financier Marc Rich.

By every yardstick that counts this is the Canadian deal of the year: two home-grown iconic mega-corporations, an army of Canadian lawyers and minimal involvement of U.S. law firms. Canadian, eh? The Maple Leaf can fly proudly.

2. ROCK ME LIKE A HURRICANE: CHINA NATIONAL BUYS PETROKAZ FOR US$4.2B

When it became apparent that Minmetals was not going to buy Noranda, China pundits immediately turned to Husky Energy, controlled by Hong Kong’s Li Ka-shing. Wrong. When the long-awaited Canada-China resource mega-deal finally came, it turns out China had its sights on Calgary-headquartered PetroKaz — Hurricane Hydrocarbons, as it was named before CEO Bernard Isautier rescued it from a near-death experience.

Canadian reaction to the deal was subdued compared to the jingoist panic south of the border during CNOOC’s bid for Unocal. “It helped that what was changing hands were Kazakhstan assets,” one lawyer observes wryly.

Nonetheless, it was China’s largest resource deal to date. “It showed China could do a big North American deal,” says Clay Horner, the co-chairman of Osler Hoskin & Harcourt who represented CNPC on the deal and the related litigation fisticuffs with Russian oil giant LUKOIL.

If you have US$4.2-billion, our Kazakhstan assets are your Kazakhstan assets. Canadian, eh?

Tellingly, both CNPC and PetroKazakhstan retained Bay Street lawyers, so the oil patch’s marquee 2005 deal was run out of Toronto. Calgary firms were not entirely absent.

Bennett Jones grabbed a secondary mandate acting for Goldman Sachs (Query: thanks to its Calgary or Toronto office?) while Burnet, Duckworth & Palmer retained its role as PetroKaz’s Alberta counsel.

But most of the toil and the glory went to the Toronto offices of Oslers and Davies Ward Phillips & Vineberg, leaving not a few Calgary lawyers cranky. It just doesn’t get more Canadian than that.

3. KINDER MORGAN TAKES TERASEN FOR $6.9-BILLION

When Houston-based Kinder Morgan announced it was acquiring Vancouver-based Terasen, all hell broke loose. At least on the West Coast.

While Canadians accepted the PetroKaz-China deal with relatively good grace, Kinder Morgan’s play for the former B.C. Gas apparently touched a nerve.

“There were a minimum of 6,000 — by some later counts as many as 9,000 — interventions before the B.C. Utilities Commission,” says Jonathan Drance of Stikeman Elliott, who headed the legal team representing Terasen. “This was the most controversial takeover in B.C.for generations.”

And this in a province that is no stranger to corporate controversy. Remember Weyerhaeuser’s acquisition of MacMillan Bloedel? And the Duke Energy-Westcoast Energy deal?

The NDP called on the provincial Liberal government to block or at least slow the sale. A member of the legislature put forward a motion to tie the outcome to the resolution of the Canada-U.S. softwood lumber dispute. Canadian, eh?

Against that backdrop, the actual deal structure was a yawner. But Kinder Morgan still seems to be reeling slightly. In response to the Canadian reaction, the company has instructed its lawyers to keep a low profile. What a bummer. It was the marquee transaction for the Calgary and Vancouver offices of Blake Cassels & Graydon — and they can’t talk.

4. KKR BLINKS, ACQUIRES MASONITE FOR $3.26B

Conventional wisdom says you do not get into staring contests with private equity funds because you will lose. Ruthless and unsentimental, they don’t fall in love with assets.

Conventional wisdom be damned. Masonite’s institutional shareholders — notably Eminence Capital, Greystone Management Investments, Mawer Investment Management and Ontario Teachers’ Pension Plan — dug in their heels and made KKR blink and sweeten its bid by $2.05 per share.

“Private equity funds do not like to do that,” says William Gula of Davies, who headed the team for Masonite.

Not that, post-Masonite, anyone’s casting KKR as a softie. But the deal highlighted again the considerable clout of institutional shareholders, even in deals involving the ruthless new kings of capitalism.

Here’s the good news about being acquired by a private equity fund versus a competitor. Pre-acquisition, Masonite was one of the world’s largest manufacturers of doors and other building products, headquartered in suburban Toronto. Post-acquisition, Masonite is one of the world’s largest manufacturers of doors and other building products, headquartered in suburban Toronto.

Canadian, eh?

5. BARRICK ANTES UP US$10.4B FOR PLACER DOME

Any other year and a surprise bid by Toronto-based Barrick for Vancouver-based Placer Dome would be a candidate for deal of the year. The New Barrick will leapfrog competitor AngloGold Ashanti to become the number one gold producer in the world. Number one. Has a nice ring to it.

And that’s not all. The deal is a creative and strategic three- way. A $1.35-billion agreement with Goldcorp divests the new Barrick of a whole whack of non-strategic assets (and at least one strategic one, Goldcorp’s deal team was no slouch), which helps finance the acquisition and, in the process, jumps Goldcorp to the No. 3 spot.

A team at Oslers led by Mr. Horner ran the deal for Placer, a longtime client that has taken a number of Oslers lawyers around the world and to global reputations through various deals and incarnations.

Barrick has done the same for Kevin Thomson and sundry colleagues at Davies. The critical question is, who will end up with the lion’s share of New Barrick’s work? Canadian, eh? Law firms fighting over a dwindling number of large domestic clients. It’s about as Canadian as curling.

6. PAPER AND PLASTIC: METRO BUYS A&P FOR $1.7B

“A boring deal in a boring industry,” scoffs one lawyer. But then it is understood that his firm’s client was the sidelined loser in the deal that saw Montreal-outbound Metro Inc. add 236 Ontario A&P stores to become the province’s No. 2 grocer.

The way the deal played out was interesting. Private equity players were sidelined almost immediately because it was clear that strategic buyers Metro and Sobeys — the Nova Scotia chain that has been aggressively spreading — were bound to outbid them, says Norman Steinberg, co-chair of Ogilvy Renault, Metro’s Canadian counsel on the deal. “For both Sobeys and Metro, it was a deal they couldn’t afford to lose,” Mr. Steinberg says.

Most onlookers were betting on Sobeys. Its CEO was a former A&P Canada executive, it already had an Ontario presence, it was bigger and likely had more cash. Metro had CEO Pierre Lessard — who personally wooed A&P CEO Christian Haub with a $1.7-billion cash- and-share offer he bet was something Sobeys wouldn’t or couldn’t match.

The acquisition of A&P improves Metro’s odds of being one of the ones left standing as the gradual consolidation of the Canadian industry plays out. On the surface, a case of a Canadian company purchasing Canadian assets to gain share in the largest Canadian market. Canadian, eh?

But the deal gives 16% of this Canadian company to the New Jersey- based vendor, which is actually controlled by the German Haub family. Can you say globalization?

7. VODAFONE PAYS US$3B FOR CLEARWAVE

The deal between the two wholly owned subsidiaries of TIW and Vodafone Group gave Vodafone a much-desired foothold in the cell- phone market in the Czech Republic and upped its stake in Romania.

The deal lacks dissenting shareholder angst or the drama of a hostile bid. And the ending — a dissolution of a young Canadian company — is a yawner. But getting there? Wow.

This sleeper hit had Fasken Martineau’s deal superstar Robert Pare and his Montreal team, in his words, “scratching our heads on how to do it.”

They were not alone. “It essentially involved a primarily European transaction — the sale of a Dutch holding company for businesses in Romania and the Czech Republic — together with a Canadian winding up of TIW under a somewhat novel use of the arrangement mechanism,” says David Glennie of the London office of Blake Cassels & Graydon, who co-ordinated the Vodafone team.

You need a manual to decipher the structure, but the bottom line is that Vodafone gets attractive European assets. TIW shareholders get cash. Creditors — including a somewhat impatient Canada Revenue — get paid.

TIW goes bye-bye.

So, a British company essentially purchases a Dutch holding company with operations in Romania and the Czech Republic under U.K. law. The Canadian bit is a wind-up of what remains of TIW. Canadian, eh?

But increasingly, Canadian lawyers define a deal’s Can-Con in a pragmatic, un-CRTC way: How much work it gives its Canadian lawyers. And by that standard, it shines.

8. BROOKFIELD BUYS O&Y REIT FOR $2.1-BILLION

All Philip Reichmann, chief executive officer of O&Y Properties, wanted to do was unload a portfolio of Canadian real estate just as he saw the market near its peak. He ended up presiding over an astounding deal that challenged the conventional wisdom of buyers, sellers, investment bankers and lawyers.

As Stikemans’ Jonathan Drance sees it, the sale of O&Y REIT is the first deal in over a decade to have forced investment dealers and lawyers to go back to the basics and seriously examine the plan of arrangement as a vehicle in M&A transactions.

The deal featured a three-month open auction and global marketing campaign, 130 potential bidders, 54 “qualified” bidders and nine written bids. A surprisingly all-Canadian winner — a consortium of BPO Properties (a sub of Brookfield Properties), the Canada Pension Plan Investment Board and Arca Investments.

Then things got interesting. Lawyers had to design an efficient transaction structure that would allow contemporaneous acquisition of both O&Y REIT and O&Y Properties, which owned 42% of the REIT’s equity and held 50.1% of its shares.

They thought about a plan for arrangement then remembered “you cannot do a plan of arrangement of a REIT,” says William Braithwaite of Stikeman Elliott, who led the team for Brookfield.

So, they devised “a novel reorganization” of the REIT and took their beautiful cross-conditional baby to the shareholders of both companies.O&Y REIT’s institutional shareholders wanted more money. “The shareholders essentially said: ‘We don’t care if you shopped the entire universe, it’s still not enough,'” says Goodmans’ Stephen Halperin.

Brookfield stood its ground, and the REIT shareholders voted the deal down. “An exhaustive auction, an independent fairness opinion and recommendations from the board doesn’t get you a deal any more,” says Mr. Braithwaite.

So what did? Brookfield asked the corporation’s shareholders to take less 28 cents a share less than they had agreed to so that unitholders could take 75 cents more “That’s never been done before,” says Mr. Braithwaite (who’s still in a bit of shock). To free up more money, it is understood that O&Y Properties’ lead financial adviser RBC Dominion Securities slashed its fee by more than 20%. That’s been done before, but hardly ever.

Canadian, eh? In a year dominated by cross-border and global deals, the sale of O&Y REIT is one of the few big-buck domestic transactions–if only by default.

9. TUI SINKS US$2B CASH INTO WINNING CP SHIPS

Word on the street is that CP Ships Ltd. didn’t know it was for sale when interested buyers started knocking on the door. But what with an insider trading investigation, restatements of nine quarters worth of financial results, and a “pretty abrupt CEO resignation” (Frank Halliwell left after only seven months), “the sharks smelled blood in the water,” says David Woollcombe, a partner with McCarthy Tetrault, which represented CP Ships in its sale to TUI. And they started circling.

If they thought they could get the troubled and somewhat demoralized company for cheap, they were in for a shock. “Everyone with the slightest interest approached us,” says Mr. Woollcombe. While those involved don’t use the term bidding war, “the market was surprised at how high a price we got, and the shareholders were delighted.”

In erasing the third of the five CP legacy companies from the landscape, the deal exemplifies the international nature of a traditional industry. It was a German industry buyer who walked away with CP Ships, but among the interested parties there was more than one financial player. Indeed, rumour has it a private equity fund first informed CP Ships it had a “for sale” sign taped to its back.

Canadian, eh? Granted, CP Ships is headquartered in London and the buyer is German. But how can a deal involving a legacy Canadian Pacific company not be Canadian? On the legal side, lawyers agree it was principally a Canadian deal.

“When TUI first got involved in the acquisition, they correctly identified it as primarily a Canadian project and fortunately contacted us before getting immersed with U.S. or U.K. counsel … We engaged the counsel in another jurisdiction,” says Mr. Westlake. Woo-hoo for us.

10. HOSTILE BIDS FOR HBC, VINCOR

In 2005, fans of unsolicited M&A activity had plenty of deals to choose from. And just as Constellation Brands’ bid for Vincor International Inc. looked guaranteed to be the best hostile bid of the year, Jerry Zucker’s Maple Leaf Heritage Investments decided to buy HBC.

Each saw a U.S. suitor making a play for a very unwilling Canadian target. In Vincor, it was a 200-brand industry competitor on an apparently unquenchable acquisition spree. In HBC, a financial player. Vincor’s management is willing to sell. HBC’s management would rather die. It’s certainly an option. Remember Eaton’s? The deals exemplify almost every trend of 2005 — unsolicited bids; industry consolidation against a global backdrop; increasing competitive pressure on stalwart, iconic companies; the continuing rise of private equity funds; and the cross-border aspect. There is even a tinge of shareholder activism.

The symbolic impact of the global deals of the year is profound. Pragmatically, however, the deals that kept Canadian corporate lawyers in billable hours were of the mid-market and traditional U.S. cross-border variety–with private equity players under every second stone.

“M&A moved into an all new gear in mid-2005,” says Frank Allen of Borden Ladner Gervais. He spent the last quarter of 2005 juggling U.S. private equity fund Golden Gate’s $1-billion acquisition of GEAC Computer and the Canadian part of Apollo Group’s US$1.3- billion acquisition of Linens ‘N Things.

On the domestic side, he was shepherding Clarington Corp. through the competing bids of Industrial Alliance and CI Financial.

Canadian, eh? These days, anyways.

(Copyright National Post 2006)