nuckin_futz Posted December 7, 2012 Share Posted December 7, 2012 The federal government has approved two controversial takeovers by Asian state-owned enterprises of Canadian oil companies, but will block any further acquisitions in the oil sands by such government-owned firms. Prime Minister Stephen Harper late Friday announced a tough new foreign investment policy that erects major hurdles for acquisitions by state-owned enterprises, even while welcoming non-controlling investment from them. How much of Canada’s energy resource lies in foreign hands? Barring state-controlled investors from new takeovers in Canada’s oil sands and making it tougher for these entities to buy assets elsewhere in the country is the latest populist move from a government that has shown it has no qualms about keeping unwanted capital at bay. “To be blunt, Canadians have spent years reducing ownership of sectors of the economy by our own governments only to see them bought and controlled by foreign governments instead,” Mr. Harper told reporters. At the same time, his government approved the $15.1-billion (U.S.) bid by China’s CNOOC Ltd. for Calgary-based Nexen Inc., and the $6-billion (Canadian) acquisition by Malaysia’s Petronas of Progress Energy Corp. Those deals judged to be of “net benefit” to Canada under existing Investment Canada Act rules, but the test will now be strengthened to include a requirement that the investment embody “free enterprise principles” and industrial efficiency. “Canadians generally and investors specifically should understand that these decisions are not the beginning of a trend but rather the end of a trend,” Mr. Harper said Mr. Harper and his government have aggressively courted investment from Asia to develop the resource sector, but have now responded to public concerns about the loss of control and has pulled back the welcome mat. Over the next five years Ottawa will raise the threshold at which it reviews foreign takeovers by private sector bidders to $1-billion. But the bar will remain at $330-million for foreign state-owned enterprises. Also the federal government will consider the degree of control or influence an SOE would likely exert on the Canadian business and, similarly, on the related Canadian industry. “Thirdly, and most importantly,” Mr. Harper said, Ottawa will “consider the extent to which the foreign government in question is likely to exercise control or influence over the state owned enterprise acquiring the Canadian business.” The decision on CNOOC and Petronas was critical for Mr. Harper, who has said Canada has an urgent need to diversify its energy exports to Asia and expand its commercial relations with China and other growing economies there. The Prime Minister faced dissension in his own government over whether to allow Chinese government-controlled companies to acquire major domestic energy firms, and the public opinion polls show Canadians worry about losing control of their resources. The approval is a major victory for CNOOC Ltd., whose proposed $15.1-billion acquisition of Calgary-based Nexen Inc. represents the largest-ever foreign takeover by a Chinese state-owned company. CNOOC is one of a triumvirate of Chinese national oil companies that have been tasked by Beijing with investing abroad to help secure the fast-growing country’s energy security. CNOOC was rebuffed in a 2005 attempt to acquire U.S.-based Unocal Corp., and is now awaiting U.S. approval to acquire Nexen’s Gulf of Mexico assets. Ottawa has also given the green light to a $6-billion bid by Malaysia’s Petronas to acquire Progress Energy, a Calgary producer with significant natural gas holdings in shale gas fields of northeastern British Columbia. Petronas is proposing to build an $11-billion plant in Prince Rupert, B.C., to liquefy gas and export to Asia. The federal government has said Canada needs $650-billion to finance resources development and that much of that capital will have to come from overseas, where state-owned companies dominate the landscape. But the Prime Minister noted that 20 per cent of value of foreign takeovers it scrutinized in 2011 came from state-owned companies last year. And clearly, Ottawa ‘s appetite for such acquisitions have its limits. Ottawa rejected Petronas’ bid for Progress in October but encouraged the Malaysian company to re-apply for approval and sweeten the pot. The government blocked a $39-billion acquisition of Saskatchewan’s Potash Corp. by BHP Billiton in 2010, and vetoed a U.S. acquisition of MacDonald Detwiler & Associates in 20. *********************************** So an Australian company can't take over Potash, but this government has no qualms about handing over a major interest in the oil sands to a communist government entity. OK whatever. Link to comment Share on other sites More sharing options...
key2thecup Posted December 7, 2012 Share Posted December 7, 2012 The federal government has approved two controversial takeovers by Asian state-owned enterprises of Canadian oil companies, but will block any further acquisitions in the oil sands by such government-owned firms. So an Australian company can't take over Potash, but this government has no qualms about handing over a major interest in the oil sands to a communist government entity. OK whatever. Link to comment Share on other sites More sharing options...
nuckin_futz Posted December 7, 2012 Author Share Posted December 7, 2012 Harper loves the Chi-Com gov't. Link to comment Share on other sites More sharing options...
key2thecup Posted December 7, 2012 Share Posted December 7, 2012 China good, Israel good. Australia bad. Link to comment Share on other sites More sharing options...
kyledude Posted December 7, 2012 Share Posted December 7, 2012 Link to comment Share on other sites More sharing options...
Tearloch7 Posted December 7, 2012 Share Posted December 7, 2012 Have I expressed my opinion lately that Harper is a turd? .. oops, there I go again .. Link to comment Share on other sites More sharing options...
Lancaster Posted December 8, 2012 Share Posted December 8, 2012 Had it been a Canadian company buying up some massive Chinese company, nobody would even care. Remember back during the 90's when US companies were buying up Canadian ones because the CAD was so low? It's nothing new. This is just international market integration. You can't expect to have free trade and open mobility for capital, yet at the same time just close/open deals whenever you feel like it. That being said, I don't agree with selling of Canadian assets to state-controlled corporations. Link to comment Share on other sites More sharing options...
lowest common denominator Posted December 11, 2012 Share Posted December 11, 2012 They were saying on BNN that maybe for Canadian banks to get their foot in the chinese door, we'll have to do a bit of give and take with the resources here. Not that I agree with what is going on. In China they pronounce Canada "Jianada" Kinda sounds like Chinada, watchout now! Link to comment Share on other sites More sharing options...
MoneypuckOverlord Posted December 11, 2012 Share Posted December 11, 2012 We have no one to blame buy the Canadian government for not buying this company. OUr Government should start opening up companies business style. Fail Link to comment Share on other sites More sharing options...
Lancaster Posted December 11, 2012 Share Posted December 11, 2012 We have no one to blame buy the Canadian government for not buying this company. OUr Government should start opening up companies business style. Fail Link to comment Share on other sites More sharing options...
Electro Rock Posted December 11, 2012 Share Posted December 11, 2012 Who dares oppose Chairman Harper? We will smash your dog head! Seriously, this has everything to do with being able to fully access to the Chinese market, and also that we no can no longer count on the U.S. being nearly as dependent on our oil given their shale oil deposits. Link to comment Share on other sites More sharing options...
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