Feds or­der full re­view of pro­posed Ae­con takeover

Canadian agen­cies be­lieve Chi­nese firm’s $1.5B bid could threaten na­tional se­cu­rity

Ottawa Citizen - - FP - ROSS MAROWITS

Canadian se­cu­rity agen­cies are voic­ing their con­cern about the pro­posed takeover of Ae­con Group Inc. by a Chi­nese state-owned busi­ness, prompt­ing Ot­tawa to or­der a full na­tional se­cu­rity re­view of the deal.

“Based upon the ad­vice we have re­ceived from na­tional se­cu­rity agen­cies we be­lieve that there is a po­ten­tial of in­jury to na­tional se­cu­rity,” Karl Sas­seville, a spokesman for Eco­nomic De­vel­op­ment Min­is­ter Navdeep Bains, said in an in­ter­view.

He said the cabi­net or­der is the next step in the “rig­or­ous” re­view process but de­clined to spec­ify what prompted se­cu­rity agen­cies to make this rec­om­men­da­tion.

Toronto-based Ae­con said Bains in­formed the com­pany that cabi­net has or­dered a fur­ther in­ves­ti­ga­tion of the deal un­der the In­vest­ment Canada Act, which will take more time.

Con­cerns have been raised about the murky hold­ings of Chi­nese state-owned CCCC In­ter­na­tional Hold­ing Ltd. (CCCI), the po­ten­tial in­volve­ment of the Com­mu­nist Party in de­ci­sion-mak­ing and alleged cor­rup­tion.

CCCI’s pro­posed takeover of the Canadian con­struc­tion com­pany has come un­der in­tense do­mes­tic crit­i­cism from its ri­vals in the con­struc­tion in­dus­try and Con­ser­va­tive mem­ber of Par­lia­ment Tony Cle­ment, a for­mer in­dus­try min­is­ter.

“About time!” Cle­ment tweeted about the full na­tional se­cu­rity re­view.

Govern­ments in Europe and the United States have also warned against ap­prov­ing the $1.5-bil­lion deal.

The de­ci­sion may give the gov­ern­ment some wig­gle room in this po­lit­i­cally dif­fi­cult is­sue, said Mark Warner, an in­ter­na­tional trade and in­vest­ment lawyer.

“It cer­tainly gives them an ex­cuse to get out of it if they want to,” he said from Toronto.

“But I think it’s prob­a­bly too early to say that this is an in­di­ca­tion that it won’t be ap­proved.”

Yuri Lynk of Canac­cord Ge­nu­ity said the cabi­net or­der is not a sur­prise and he doubts it will re­sult in the deal not clos­ing.

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