Canada Blocks China-Led Deal for Construction Firm
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. This is the first major foreign takeover blocked by the Trudeau government since he won power in 2015.
"In principle, China always opposes the politicization of this kind of trade and investment activity and we oppose the mistaken method of carrying out political interference on the basis of so-called national security reasons", ministry spokesman Lu Kang said on Thursday.
In April 2008, the federal government stopped a $1.3-billion deal that would have seen Vancouver-based MacDonald, Dettwiler and Associates' space division, which refurbished the Canadarm, find a new home at the USA -based Alliant Techsystems Inc.
China's CCCC says has not received notification of Aecon deal rejection from Canada.
The government's move to block Accelero had many anxious because it came just as BlackBerry was putting itself up for sale and as Tony Clement, the then-treasury board president and former industry minister, reasserted that the country would be stringently reviewing any foreign investment from a national security perspective. Aecon provides integrated turnkey services to private and public-sector clients in the Infrastructure and Industrial sectors, and provides project management, financing and development services through its Concessions segment.
Since its creation, Aecon has been involved in the construction of some of Canada's most iconic landmarks, including the CN Tower, St. Lawrence Seaway, Vancouver Sky Train and the Montreal's Trudeau International Airport.
In a statement, Aecon said they were informed that the Governor in Council has issued an order under the Investment Canada Act directing CCCC not to implement its proposed acquisition of Aecon, and "as a result, the Arrangement between Aecon and CCCI will not proceed".
"The deal offered considerable benefits to Aecon and its various stakeholders".
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Beck said that while the sale of Aecon is now dead, his company has "secured numerous large-scale projects" and has "a significant pipeline of opportunities ahead of it". She had called for it to be blocked.
In February, Ottawa launched a full-scale national security review of the transaction.
Conservative MP Tony Clement - a vocal critic of the takeover deal - welcomed the decision, telling reporters he is glad the federal government listened to its national security advisers.
The move comes at a critical point for the future of the country's trade relationships.
The financial holding division of China Communications Construction Co., Ltd. (CCCC) proposed to buy the Canadian construction firm previous year. In a paper the Institute published this month, Chen argues that a CCCI takeover of Aecon would imperil Canada's national interests: "The danger lies in our laziness in strategic thinking and refusal to take a long-term view".
Prime Minister Justin Trudeau visited China in December, but left without a formal commitment to moving free trade talks past the exploratory phase into formal negotiations.
"It begs the question: how many other Chinese or other state-owned enterprises have gone under the radar, under the automatic review limit and have acquired various companies in Canada that could also be considered national security risks?" he said. An added likely factor was the USA government's increasing alarm about China's purloining of American technology and its underhanded trade practices, as well as Beijing's manipulation of the North Korean nuclear crisis.
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