Canadian government announced that it was blocking a proposed $1.18 billion USD acquisition of the Canadian firm Aecon Group Inc. by the China Communications Construction Company (CCCC) over national security concerns.
SUMMARY
As of May 31, the Canadian government announced that it was blocking a proposed $1.18 billion USD acquisition of the Canadian firm Aecon Group Inc. by the China Communications Construction Company (CCCC) over national security concerns. Had the deal gone through, CCCC would have received troves of documents from the Canadian government detailing government contracts, including ones involving nuclear reactors. This is the latest acquisition block by a western country, as fears over Chinese companies close to Beijing leadership gaining control of private entities abroad are on the rise. In early May, there was a conflict between the United States and China after a Chinese company attempted to purchase American company SkyBridge Capital after 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 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-border facilitation but will likely deter Chinese would-be investment into the United States. However, many industries are still open to investment, partnerships, and joint ventures for Chinese and US businesses to pursue. Potential Chinese investors would likely benefit from public messaging and public relations campaigns aimed to win over US constituents. Likewise, US companies should also understand the broader socio-political implications that affect the investment climate and the regulations that govern these types of investments when taking on Chinese investors.
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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