Next month shareholders of Nexen vote on a lucrative offer from a company owned and controlled by the Chinese government for all of the shares in the Calgary-based, Canadian oil and gas company. Because this would be a foreign takeover of a large Canadian company, the purchase requires the approval of the federal government agency, Investment Canada, before it can go through. The fact that the buyer is a company controlled by the Chinese government means that the pending decision by Ottawa has already attracted a lot of attention and comment.
The Nexen deal clearly falls into the ambit of both of the last two categories and is also of relevance in the productivity and innovation area. CNOOC is far from the only company that has been forced to cancel plans put in place when crude oil prices were still in triple-digit territory.
However, the conditions it agreed to follow when it was allowed to purchase Nexen were not seen as contingent on prices staying high. Are you looking for a stock? Try one of these. News Video. News Video Berman's Call. Related Video Up Next. The Canadian company recently underwent a management shake-up and has been seen for years as a potential target. He won kudos for improving the reliability of such projects as the huge Buzzard oil field in the North Sea after years of missed production targets.
Taylor said a rival bid is unlikely to emerge, given the huge premium and the fact that CNOOC is offering all cash.
In addition, it would be difficult for Harper to quash the deal after touting investment opportunities throughout Asia. According to Thomson Reuters data, the takeover would be bigger than any foreign deal completed to date by a Chinese company.
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