Ottawa rejects takeover of company with Site C contract

Contract rejected

"The Aecon decision suggests that any major takeover of a major Canadian critical infrastructure company would be looked at very closely on national security grounds", said Wesley Wark, director of the Security and Policy Institute at the University of Ottawa.

The completion date of Aecon's deal with CCCC International Holding Ltd, the overseas investment and financing arm of China Communications, had been pushed back in February as Canada extended a national security review, underscoring rising wariness of Chinese firms buying up assets in Western countries. Under the Investment Canada Act, a national security review is conducted with input from Canada's security and intelligence agencies and the Department of Public Safety. "Based on their findings, in order to [protect] national security, we ordered [the Chinese firm] not to implement the proposed investment". (TSX:ARE), citing national security concerns.

New Democrat MP Brain Masse said while he agrees with the government's rejection of the bid, Ottawa took too long to come to a decision.

In an unusual move, the Trudeau cabinet has rejected the sale of Canada's third largest construction company to a notorious Chinese state-owned enterprise for "national security" reasons. The federal government has the ability under the Investment Canada Act to prevent the transaction if it reasonably believes that the transaction presents national security concerns.

"These is no doubt that the decision made by the Canadian government is by no means a good news for the investment co-operation between China and Canada", said a statement released by the Chinese embassy in Ottawa. "Premier Horgan now has more freedom of action to increase regulatory measures for Site C to ensure worker safety and restrict the inevitable, and to me, unacceptable, environmental damage", she said.

CCCI's Beijing-based parent, CCCC, is one of the biggest engineering and construction companies in the world and is the largest contractor building China's Belt and Road Initiative across Asia through to Africa. The Chinese state-owned enterprise is 64 per cent owned by the Chinese government.

"If they are making investments, first of all they are not making investments necessarily based on market decisions because they are directed by a country, directed by a state".

The Conservatives had been pressing the Trudeau government for a formal national security review of the takeover.

Earlier this year, the Aecon-Flatiron-Dragados-EBC Partnership was announced by BC Hydro as having been awarded the contract to build the Site C dam's generating station and spillways. The overall outlook is positive with areas of strength in Aecon's business in infrastructure, nuclear, telecom, gas and power distribution, expected to outweigh the impact of fewer opportunities in commodity and oil related markets.

As part of the net-benefit analysis of the deal, Innovation Department officials examined details of Aecon's current activities in the United States.

The acquisition of Aecon by the Chinese firm had already cleared most of its hurdles, after receiving the approval of Aecon shareholders, court approval and clearance from Canada's competition regulator. The decision is in pointed contrast to the decision by the Australian government in 2015 to permit an acquisition of a prominent Australian construction company (John Holland) by a CCCI affiliate. CCCC is 64-per-cent owned by the Chinese government.

The World Bank in 2009 banned CCCI from bidding on construction projects for eight years due to a bid-rigging scandal in the Philippines.

Aecon Group Inc. (TSX: ARE) is a Canadian leader and partner-of-choice in construction and infrastructure development.

What happens to trade talks?

Related News:

Most liked

Russian oligarch met with Michael Cohen at Trump Tower during transition
Intrater said the meeting included only a brief discussion about relations between the United States and Russian Federation . Trump's inaugural committee secured him tickets to an inaugural dinner, and Vekselberg attended the dinner with him.

Polish novelist Olga Tokarczuk wins Man Booker Prize 2018 for Flights
The £50,000 prize will be divided equally between Tokarczuk and her Los Angeles-based translator Jennifer Croft . The Man Booker International Prize celebrates the English translations of works of international literature.

"European Union slams ‘fantasy" UK Brexit gambits
The plan, also known as "max fac", is one of two options under consideration by the Cabinet and a model favoured by Brexiteers. Minister of State for European Affairs Helen McEntee welcomed Mr Corbyn's commitment to avoid a hard border.

Putin says he will step down in 2024 as constitution requires
Macron acknowledged Paris and Moscow disagreed on a range of issues but called for "strong multilateralism". He also railed against the United States applying its laws beyond its borders to punish foreign companies.

Harvey Weinstein's alleged victims speak out, now 'have real hope for justice'
Despite reporting the incident to the NYPD immediately, Vance's office declined to file charges after two weeks of investigation. The rape complaint refers to an unidentified woman who accuses Weinstein of raping her in a Manhattan hotel in 2013.

SpaceX Launches Several Satellites On Falcon 9 Rocket From Vandenberg
When complete, the Iridium Next constellation will include 75 satellites - 66 operational satellites and nine spares. About 10 minutes after liftoff, a separation system on the second stage will deploy the GRACE-FO satellites.

Is Nicki Minaj dating Eminem?
Nicki took to Instagram late Thursday to hype her latest work on, Big Bank , a YG track that also includes Big Sean and 2 Chainz . Since my divorce I've had a few dates and nothing's panned out in a way that I wanted to make it public.

Morgan Freeman accused of sexual harassment; apologises
He has also been nominated for an Emmy for Revelations Entertainment's The Story of God with Morgan Freeman . She claimed that Freeman made comments about her body nearly every day and would rub her lower back.

Could Hanley Ramirez be on the Twins' radar?
Riley Williams III restored cartilage, and the Red Sox said then he was expected to miss more than the first month of the season. Proclaiming himself fit after offseason left-shoulder surgery, he slashed.330/.400/.474 with three homers in April.

SRH vs KKR: Who will win today’s IPL 2018 playoffs game?
Sunrisers Hyderabad vs Kolkata Knight Riders is the 59th of total 60 games to be played in the Indian Premier League season 11. If you have access to the television, then you go for Star Sports tv channels as it's the official broadcaster.

Weinstein accusers Rose McGowan, Asia Argento respond to arrest: ‘We got you’
He sought treatment for sex addiction at a facility in Scottsdale, Arizona, the New York Times reported . Film producer Harvey Weinstein arrives at the 1st Precinct in Manhattan in New York , May 25, 2018 .

Philip Roth Once Torched Donald Trump In The Most Literary Way
Roth, who lived in NY and CT , was best known for mining the Jewish-American experience in his more than 30 novels. Thurman said that after he stopped writing Roth spent his free time reading and swimming, and meeting friends.

Trump gives commencement address at US Naval Academy
Trump is traveling to Annapolis, Md ., to address the U.S. But in recent years, the problem grew worse. Naval Academy graduation ceremonies.

Split With Deripaska to Avoid Sanctions, US Tells GAZ
In addition, since June 28, members of the En+ board of directors, which is controlled by Deripaska, have left their posts. The company's controlling shareholder, En+, said on May 18 that Deripaska had resigned from its board of directors.

Latest updates on the Noblesville West Middle School shooting
A new threat has prompted another lock-down at Noblesville High School, the district said in an email to parents. Vice President Mike Pence , who previously served as governor of IN , offered prayers for the victims.