Flowserve to Terminate Arrangement Agreement Due to Regulatory Hurdle in France
Flowserve US Inc. has announced its intention to terminate the Arrangement Agreement with Velan Inc. due to the inability to obtain regulatory approval from France. The agreement, which involved Velan, Flowserve, and 14714750 Canada Inc., was aimed at completing 15 global critical-mineral projects. Despite offering remedies and undertakings to the French Authorities, Flowserve was informed that the required regulatory approval would not be granted. As a result, Velan will resume operations as an independent business, free from the constraints of the Arrangement Agreement.
Regulatory Approval Obstacle
The termination of the Arrangement Agreement is a direct result of the failure to secure regulatory approval from France. Flowserve's attempts to address the concerns of the French Authorities were unsuccessful, leading to the decision to terminate the agreement.
Resuming Operations as an Independent Business
With the termination of the Arrangement Agreement, Velan will now operate independently, without the covenants and restrictions imposed by the agreement. While disappointed with the outcome, Velan remains confident in the future of its business and will explore strategic options to create value for stakeholders.
About Velan Inc.
Founded in Montreal in 1950, Velan Inc. is a leading manufacturer of industrial valves. As a family-controlled public company, Velan employs approximately 1,650 people across nine countries. The company's shares are listed on the Toronto Stock Exchange under the symbol VLN.
In conclusion, Flowserve's decision to terminate the Arrangement Agreement highlights the regulatory hurdles faced in obtaining approval from France. This development allows Velan to resume operations independently, focusing on its future growth and exploring opportunities to create value for stakeholders.
Implications of Flowserve's Termination of Arrangement Agreement on New Businesses
Flowserve's decision to terminate its Arrangement Agreement with Velan Inc. due to regulatory hurdles in France could have significant implications for new businesses. This development underscores the importance of obtaining regulatory approval in international collaborations, particularly in the context of critical-mineral projects.
Regulatory Approval: A Potential Roadblock
The termination of the Arrangement Agreement highlights the potential challenges that regulatory approval can pose for businesses. Flowserve's unsuccessful attempts to address the concerns of the French Authorities serve as a stark reminder for new businesses of the complexities involved in navigating international regulatory landscapes.
Independence and Strategic Opportunities
On a positive note, the termination of the agreement allows Velan to operate independently, free from the constraints of the agreement. This could be seen as an opportunity for new businesses to reassess their strategic direction and explore different avenues for growth and value creation.
Lessons from Velan Inc.
As a leading manufacturer of industrial valves, Velan's experience offers valuable insights for new businesses. Despite the setback, the company remains confident in its future and is committed to exploring strategic options to create value for stakeholders.
In conclusion, Flowserve's decision to terminate the Arrangement Agreement due to regulatory hurdles in France serves as a cautionary tale for new businesses about the potential challenges of international collaborations. However, it also highlights the opportunities that independence can bring, encouraging businesses to remain adaptable and resilient in the face of unexpected obstacles.
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