Nov 13, 2017
A recent article by The Globe and Mail looks at the sale of Canadian construction firm Aecon Group Inc. to Beijing-based China Communications Construction Co. Ltd. (CCCC) for $1.45 billion. According to authors Andrew Willis and Jeffrey Jones, the deal, which still needs federal approval, will have to meet a "net benefit test" to ensure the transaction is of benefit to Canada. They also report that the transaction will be closely scrutinized because of CCCC's ownership structure and the nature of some of Aecon's work. According to its website, Aecon is a Canadian leader in the construction and infrastructure development industry and has helped to build many of Canada’s most famous infrastructure landmarks. It also “builds, refurbishes, maintains and decommissions nuclear plants” and has worked on more than 400 nuclear energy projects.
Peter Glossop, a partner in Osler’s Foreign Investment Practice Group, provides insight on the deal, which, as the article points out, “represents one of the first major tests of the Trudeau government's approach to Chinese takeovers.”
"Not to say there's necessarily a problem, but it's logical to assume that if you're in the nuclear business or power-generation business, these are the kinds of things that the government has identified as areas that they'd like to understand from a security perspective," says Peter.
For more information, read Andrew Willis and Jeffrey Jones’ full article “Aecon eyes growth with $1.45-billion sale to Chinese construction group.”
Peter provides further insight on Aecon's agreement and the likelihood that the deal will be passed in an interview with Business News Network. Watch the video.