Kenney issues blunt takeover warning
Immigration Minister Jason Kenney has blunt advice for foreign state-controlled enterprises that want to take over a major Canadian company in a key national industry — don’t even bother trying.
Expounding on his government’s new rules on foreign takeovers, including criteria that prevents state firms from buying up oilsands companies in all but exceptional circumstances, Kenney said his government is simply exercising Canadian sovereignty.
“If you are a state-owned enterprise that’s tightly controlled by a foreign government, and you’re going to have a disproportionate influence in a Canadian industry, there’s little or no chance that you’ll get approval in Canada,” the regional cabinet minister for southern Alberta told reporters in Calgary.
“You probably shouldn’t even bother making the acquisition here.”
Kenney reiterated that each deal will be considered on its own merits, and Canada is still open for business. But he emphasized new criteria laid out by Prime Minister Stephen Harper earlier this month.
The new rules state the federal industry minister will now closely examine all state-owned enterprise transactions. Kenney said to him, the most important criteria is determining the extent to which a foreign state is likely to exercise control or influence over the stateowned enterprise acquiring
If you are a state-owned enterprise that’s tightly controlled by a foreign government, and you’re going to have a disproportionate influence in a Canadian industry, there’s little or no chance that you’ll get approval
JASON KENNEY
a Canadian businesses.
“I make no bones about it, that yes, I have concerns about wanting to ensure that foreign governments do not directly or indirectly end up with a disproportionate control of key Canadian industries, or large parts of the Canadian economy,” Kenney said.
Although it has stirred widespread debate, Kenney said the Harper government approved the Chinese stateowned CNOOC’s $15.1-billion acquisition of Calgary-based Nexen because the deal was struck before the new rules were in place.
“We’re not going to try to unscramble the omelette.”
CNOOC has pledged the company will make Calgary the head office for its North and Central American operations, it will list its shares on the TSX, and it will build upon Nexen’s existing community and charitable programs.
Kenney said although Canada expects CNOOC to keep its promises, it’s “a challenge for us to ensure that the companies who provided undertakings actually do comply, and we’ll do everything we can to ensure that happens.”
However, NDP Natural Resources critic Peter Julian said no argument from the Harper Conservatives is going to change the fact they ultimately approved CNOOC’s takeover of Nexen.
He said the government can always find a reason to claim “exceptional circumstances” if they want to approve a fu- ture deal, even though Canadians are concerned about the foreign influence in key Canadian industries, including the oilsands.
“Minister Kenney is just showing desperate political spin,” Julian said, adding that the country has seen other foreign takeovers where there were promises made to maintain jobs in Canada, and those promises were soon broken.