Read this story from CBC.ca on the federal government’s announcement today that it is postponing its decision under the Investment Canada Act as to whether to permit the purchase of Canadian oil and gas company Nexen by Chinese state-owned CNOOC. (Oct. 11, 2012)
Industry Minister Christian Paradis has extended the federal government’s review of China National Offshore Oil Corp.’s proposed takeover of Nexen Inc. under the Investment Canada Act by 30 days.
CNOOC, one of three Chinese oil companies controlled by the Chinese government, is trying to buy Calgary-based Nexen in a $15-billion takeover.
Shareholders have already signed off on the deal, but any deal worth more than $331 million to take over a Canadian company requires regulatory approval from the Canadian government.
“Extensions to the review period are not unusual,” Paradis said. “In general terms, the Act provides an initial 45 days for the review, which can be extended for an additional 30 days.”
“The review period may be extended again, with the consent of the investor. A decision can be made at any time within this period,” he said.
Under the terms of the act, the transaction must be assessed on six factors, including whether or not it is of “net benefit” to Canada. That clause was most recently invoked with BHP Billiton’s $40 billion offer to buy PotashCorp. in 2010, which Ottawa nixed.
The proposed Nexen takeover has sparked concern across Canada, with Prime Minister Stephen Harper having said it “raises a range of difficult policy questions.”
The NDP is opposed to the deal, citing national security and environmental concerns in urging Ottawa block the transaction.