Canada’s industry minister announced Thursday a 30-day extension to review Chinese state-owned energy giant CNOOC’s $15.1 billion takeover bid for the Canadian oil and gas company Nexen.
“The proposed transaction is undergoing a rigorous review under the Investment Canada Act,” Minister Christian Paradis said in a statement.
“In general terms, the act provides an initial 45 days for the review, which can be extended for an additional 30 days. The review period may be extended again, with the consent of the investor. A decision can be made at any time within this period.”
The act sets out criteria for the minister to consider when assessing whether foreign acquisitions of Canadian firms are of net benefit to Canada, such as whether the new owner will adhere to Canadian standards of transparency and disclosure, board independence and equitable treatment of shareholders.
As well, Paradis must examine how and to what extent the buyer is owned or controlled by a state, and whether the new owner will maintain capital expenditures at a level to sustain Nexen’s global position.
Minister Paradis will also look at how the takeover will impact where Nexen processes and exports oil, whether Canadians will continue to participate in its operations and whether Nexen provides support for innovation, research and development.
“The required time will be taken to conduct a thorough and careful review of this proposed investment,” Paradis said.
The proposed takeover would be China’s largest foreign investment and its largest energy deal, according to data firm Dealogic.
Canada extends review of CNOOC's Nexen takeover
