Canada extends probe of space sale to Alliant Tech

OTTAWA, March 20 (Reuters) - Canada said on Thursday it would extend its investigation of the proposed sale of two Canadian space firms to U.S. ammunition and rocket maker Alliant Techsystems Inc (ATK.N: Quote, Profile, Research), a deal that critics say could endanger national sovereignty.

Industry Minister Jim Prentice initially had until March 22 to decide whether to allow MacDonald, Dettwiler and Associates Ltd (MDA) (MDA.TO: Quote, Profile, Research) to sell a unit that makes robotics for the International Space Station.

Also included in the sale are a range of satellite technology and land-based data processing centers, some of which are used by the Canadian government. These include the high-tech Radarsat 2 satellite, launched last December.

Opponents say selling the units to a U.S. company could result in Washington denying Ottawa access to sensitive data from the satellite, such as images revealing whether U.S. ships were sailing through Canada's Arctic waters.

A spokeswoman for Prentice said the industry ministry had sent a letter to Alliant on Thursday saying the review period would be extended by 30 days from March 19. The deal is worth around US$1.325 billion.

Ottawa is obliged to review all proposed foreign purchases of Canadian companies worth C$270 million ($262 million) or more. It has never vetoed a deal.

"The sale will give Washington the power to deny Ottawa access to vital imaging information from our own satellite," said Steven Staples, president of the Rideau Institute think-tank in Ottawa.

The institute sent Prentice a letter on Thursday urging him to block the sale.

Critics are also unhappy about the sale of the robotics unit, pointing out that it has received more than C$400 million in government investment over the years.