Politicians, business rally around Cirque
Greatest concern is headquarters relocating outside home province
MONTREAL With reports of Cirque du Soleil’s imminent sale to U.S. and Chinese investors, Quebec’s politicians, business leaders and circus community say their greatest concern is keeping the headquarters in Montreal.
“The circus community is just waiting to see what is going to happen, hoping for the best, and hoping the headquarters remain here,” said Patrick Leroux, a Concordia University professor and coordinator of the Montreal Working Group on Circus Research.
The Canadian Press reports that U.S.-based private equity firm TPG Capital is poised to purchase 60 per cent of the company, while China’s Fosun Group will take 20 per cent.
The Caisse de dépôt et placement du Québec pension fund is reported to be buying 10 per cent, and Cirque co-founder Guy Laliberté will hang on to 10 per cent.
“They’re hoping as well that the new, yet-to be confirmed investors basically let Cirque du Soleil do what they do best, not meddle with content and not try to empty the brand, but rather give them the proper tools to thrive,” Leroux said.
In spite of these fears, Leroux said the sale could be a good business move for the company, which has grown to roughly 4,000 employees in 50 countries since it was founded in Baie Saint-Paul, Que. 31 years ago.
Cirque last reported $850 million in revenue for 2013, down from $1 billion in 2012.
“Cirque du Soleil is moving from a foundational period — a period of constant, rapid expansion and maturity — onto the next phase,” said Leroux.
He said Fosun Group could be a way to reach new markets in Asia.
“They haven’t had much luck in China, so perhaps this will be strategic to make inroads there,” Leroux said.
Still, there are concerns that if the headquarters did move, it would not only hurt Quebec employees and mean less tax collected by the government, but would also hit related businesses such as costume makers and circus arts schools.
“We know that when you have a head office in one place, it really brings a lot of suppliers to that business in the vicinity. If it moves, it’s other jurisdictions that have the advantage, so it is definitely better for the economy when you have strong head offices,” said Françoise Bertrand, president of Quebec’s chambers of commerce federation. Bertrand said there is also a risk of losing the cultural currency of one the province’s best-known exports.
In 1984, one of Cirque du Soleil’s first grants came from former Quebec premier and Parti Québécois founder, René Lévesque. On Thursday, the PQ criticized the Liberal government for not intervening in the sale.
“When one of Quebec’s greatest successes is sold to foreign interests, it’s an economic issue and also a political issue. We have unfortunately learned that the government has failed. We know today that the minister of economy has not even bothered to call the principal shareholder of Cirque du Soleil,” said PQ interim leader Stéphane Bédard during question period at the National Assembly.
Premier Philippe Couillard replied he does not think it is the government’s role to intervene in a private transaction.
“You would not want foreign governments to get involved when Quebec companies try to make transactions abroad,” he said.
Cirque du Soleil, TPG and Caisse all say reports of the sale are based only on rumours. At the moment Guy Laliberté owns 90 per cent of the company.
When one of Quebec’s greatest successes is sold to foreign interests, it’s an economic issue and also a political issue.