(Yicai Global) May 25 -- China condemned Canada’s decision to block the proposed sale of construction giant Aecon Group Inc. to a subsidiary of China Communications Construction Co., citing national security concerns.
China opposes the politicization of trade and investment activities and political interference in them on the basis of so-called national security reasons, said Lu Kang, spokesperson for ministry of foreign affairs in a press briefing on May 24. China hopes that Canada would cast aside its prejudice and ensure a fair and sound environment for Chinese enterprises investing in Canada.
Canada’s federal government blocked nearly CAD1.5 billion (USD1.1 billion) sale of Aecon Group to a subsidiary of CCCC on May 23. The Chinese firm announced the termination of the acquisition in a filing to the Hong Kong Stock Exchange.
This will seriously undermine the confidence of Chinese investors in Canada’s investment environment, said the Chinese embassy in Ottawa, capital of Canada, expressing Beijing’s disappointment with the decision.
Canada’s decision came at a critical point for the future of the country’s trade relationships, commented Bloomberg. Canada is considering launching trade talks with China as it seeks to become less reliant on the US market, it said, while it is also haggling with the US and Mexico over how to update the North American Free Trade Agreement.
Aecon is reviewing the decision and will have a “more detailed response in due course,” the Canadian firm said in a note to investors on May 23, according to Canada’s The Globe and Mail newspaper.
A subsidiary of CCCC entered into a purchase agreement last October to acquire a 100 percent stake in Aecon at a price of CAD1.45 billion. Canada launched a full national security review of the deal early this year.
Toronto-based Aecon is one of the largest construction and infrastructure companies in Canada. It operates through four key segments: infrastructure, energy, mining and concessions. It took part in building some of Canada’s landmarks including the iconic CN Tower in Toronto.
Acquiring Aecon was considered a major move in CCCC’s international strategy. The transaction would help it achieve a substantial breakthrough in its full foray into North America, it said earlier.
Editor: Mevlut Katik