Industry minister warns against prejudging outcome of US$15B Nexen bid
Paradis will review CNOOC Ltd.'s application before deciding whether or not to approve the transaction.
Oil & Gas
China National Offshore Oil Company
Industry Minister Christian Paradis
OTTAWA —Canada’s industry minister isn’t dropping any hints about whether he will approve or reject a Chinese state-owned company’s multibillion-dollar bid for Calgary-based Nexen Inc.
And just like Prime Minister Stephen Harper, Christian Paradis is warning Canadians not to jump to any conclusions about which way it will go.
“As I said earlier, and as the prime minister said, don’t prejudge,” Paradis said Wednesday.
“There is a test, there is a review that needs to be done, there is criteria that have to be considered.”
Paradis says he’ll wait until he reviews an application from China National Offshore Oil Company—also known as CNOOC Ltd.—before deciding whether or not to green-light the US$15.1-billion transaction.
CNOOC’s proposed all-cash takeover of oil and gas producer Nexen was a friendly bid, offering shareholders a 60-per-cent premium on their holdings.
But the deal faces a review by both Paradis, who will have to determine if the transaction is of net benefit to Canada, as well as the federal Competition Bureau.
“We’ll see what the case is, and we’ll scrutinize the case very closely,” Paradis said following an event at the Canadian Space Agency.
“It has to be for the net benefit of this country. This is the bottom line here.”
The Chinese company has made several other investments in Canadian companies over the past seven years, including buying stakes in MEG Energy Inc. and a 60-per cent investment in Northern Cross (Yukon) Ltd.
Harper’s Conservative government has rejected only two foreign takeovers in its six years in office, the most notable being the failed bid by Anglo-Australian mining firm BHP Billiton for Potash Corp. in 2010.
In 2008, the Tories blocked the $1.3-billion sale of Vancouver-based MacDonald, Dettwiler and Associates’ space-technology division to an American company.