Maxar Canada shareholders exchanged all their shares for a new U.S. holding company

In connection with regulatory approval of its acquisition of DigitalGlobe, Maxar Technologies Ltd. (“Maxar Canada”) committed that the Maxar group would restructure so that, by the end of 2019, the ultimate parent would be a U.S.-incorporated corporation. This was accomplished on January 1, 2019 pursuant to a B.C. Plan of Arrangement. There was a three-party exchange under which

  1. the Maxar Canada shareholders transferred their shares to a newly-formed B.C. unlimited liability company subsidiary of Maxar Canada (“AcquisitionCo”);
  2. a newly-formed Delaware subsidiary of Maxar Canada (“Maxar U.S.”) issued shares to the former Maxar Canada shareholders in consideration for the transfer to it of Maxar Canada in 1 ; and,
  3. AcquisitionCo issued common shares to Maxar U.S. in consideration for the issuance by Maxar U.S. in 2.

The incorporator’s share of Maxar U.S. held by Maxar Canada then was cancelled; and AcquisitionCo and Maxar Canada amalgamated so that Amalco was now a wholly-owned subsidiary of Maxar U.S.

The exchange by the Maxar Canada shareholders occurred on a taxable basis for ITA purposes. Although for Code purposes, the reorganization was expected to qualify as an “F” reorg, Code s. 367 resulted in most taxable U.S. residents, who owned Maxar Canada shares with a fair market value of U.S.$50,000 or more, recognizing a gain (if any), but not a loss, for Code purposes.

Neal Armstrong. Summary of Maxar Technologies Circular under Other – Continuances/Migrations – New Non-Resident Holdco.