Aecon move blocked by Ottawa

FEDS BLOCK AECON TAKEOVER BY CHINESE STATE-OWNED FIRM OVER NATIONAL SECURITY

The federal government has blocked the proposed $1.5-billion takeover of Aecon Group Inc. by a Chinese state-owned company for reasons of national security. After markets closed Wednesday, Economic Development Minister Navdeep Bains confirmed the government’s decision to prevent CCCC International Holding Ltd. (CCCI) from acquiring the Aecon construction firm.

The move could have an impact on Canada-China relations, which the Trudeau government has made efforts to develop since coming to office in late 2015.

China’s embassy in Ottawa responded to Wednesday’s move by warning it wasn’t good for the countries’ business relationship and that it would “seriously undermine the confidence” of Chinese investors.

The Trudeau government had been urged by experts to proceed cautiously when weighing any investment bids by Chinese state firms and to be as transparent as possible in reviewing the proposed deal.

Ottawa announced a full national security review of the Aecon deal in February.

“As is always the case, we listened to the advice of our national security agencies throughout the multi-step national security review process under the Investment Canada Act,” Bains said.

“Based on their findings, in order to protect national security, we ordered CCCI not to implement the proposed investment.

“Our government is open to international investment that creates jobs and increases prosperity, but not at the expense of national security.”

Aecon has a long history of participation in Canadian construction and engineering projects such as the CN Tower, Vancouver’s SkyTrain, the St. Lawrence Seaway and the Halifax shipyard.

In a statement Wednesday evening, the Toronto-based firm said it was disappointed with the government’s decision.