SUMMARY
In the last week of May, the Canadian government announced that it was blocking a proposed $1.18 billion acquisition of the Canadian firm Aecon Group Inc. by the China Communications Construction Company (CCCC), citing national security concerns. Had the deal gone through, CCCC would have potentially received troves of documents from the Canadian government detailing government contracts, including nuclear reactors agreements. This is the latest in a series of blocked acquisitions by western countries, as fears over Beijing interference have spread. In early May, the United States blocked the Chinese attempt to acquire American company SkyBridge Capital, following the Committee on Foreign Investment in the United States (CIFUS) rejected the proposal. In January 2018, CIFUS rejected plans for Ant Financial, a Chinese online payment company, to acquire MoneyGram International, an American money transfer company, again citing cyber-security concerns.
FAO GLOBAL ASSESSMENT
The recent rise of blocked Chinese company acquisitions in North America could mean more business for western firms that specialize in cross-cultural marketing, consulting, and legal firms. Would be Chinese investors would likely benefit from public messaging and public relations campaigns aimed at winning over consumers, legislators, and businesses. Likewise, US companies should also understand the broader sociopolitical implications that affect the investment climate and the regulations that govern these types of investments.
Related Links
- Bloomberg -- Trudeau Says ‘Australian Colleagues’ Warned on China’s Aecon Bid
- Reuters -- Canada blocks Chinese takeover of Aecon on national security grounds
- Bloomberg -- China Warns of Canada Investment Chill After Aeson Deal Blocked
- New York Times -- Canada Blocks Chinese Takeover on Security Concerns
- Business Times -- China shunned Australia’s minister during recent visit: diplomat
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