Investors, Nexen shareholders and China National Offshore Oil Co. are all awaiting a decision from Ottawa regarding China’s $15.1-billion bid to take over Nexen, an Alberta-based oil company.
If approved — and a decision could come within the week — it would become China’s biggest-ever foreign takeover.
Ottawa has twice extended its “rigorous” review of the proposal, with the current deadline set for Dec. 10. That deadline can be extended again with CNOOC’s consent.
National debate on the issue has seen opinions come from every direction. Here is a look at what some politicians, observers and experts have had to say.
Industry Minister Christian Paradis:
Industry minister Christian Paradis, whose portfolio includes foreign takeovers, has avoided talking in detail on the subject, but has cited several factors he is considering. Those factors include the impacts on Canada’s ability to compete in global markets, potential consequences on economic growth and jobs, and the deal’s likely effect on productivity and competition.
“What we hope is for Canadian companies to grow, not just here, but everywhere in the world where they have opportunities.”
Alberta Premier Alison Redford, who represents the province that will arguably be most affected, has come out in favour of the bid.
Any concerns – some have cited national security as a major one — are unwarranted, since Canada has a history of governments that make “good decisions that are in the best interest of Canada,” she said.
“I’m very hopeful and optimistic that (the deal will be approved), because I think it is the right thing for Canada and there is net benefit.”
Canadian Security Intelligence Service:
The country’s spy agency, CSIS, however, warned that foreign takeovers by state-owned companies can compromise national security.
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State-owned companies “with close ties to their home governments have pursued opaque agendas or received clandestine intelligence support for their pursuits here,” the agency wrote in a report tabled in Parliament in September.
“CSIS expects that national security concerns related to foreign investment in Canada will continue to materialize, owing to the increasingly prominent role that (state-owned enterprises) are playing in the economic strategies of some foreign governments.”
Political scientist Wenran Jiang:
Wenran Jiang, a political science professor at the University of Alberta, and current director of the Canada-China Energy and Environment Forum shuts down any security concerns, arguing they are needless and not based on fact.
He flatly says “The Nexen deal is very good for Canada.”
Liberal Justin Trudeau:
Liberal MP and leadership candidate Justin Trudeau, in what has been described as an appeal to voters in the West, recently endorsed the bid in an opinion piece that ran in Postmedia newspapers.
“Canada’s economic prospects have always been tied to trade,” he wrote. “We are a small market that must export and attract investment to create jobs and growth, and import to keep costs down and provide choice for middle-class families.”
Following the publication of his article, he said, “We need to trade with the world,” arguing that foreign investments help boost productivity and, by extension, living standards for Canadians.
In the United States, where Nexen has five royalty-free holdings, several prominent voices have joined the chorus against the bid.
Former U.S. governor Howard Dean said, “I personally don’t think that’s a good idea for either the Canadian or American assets … But I think that, of course, each government will make their own decision.”
Republican Senator John McCain:
Similarly, Republican U.S. Senator John McCain has said he understands the decision lies with Canadian politicians, but has also called on them to hold the debate publicly.
“I think it’s also a role for the legislative body to hold hearings, to get witnesses and say, ‘OK, what is this all about?’”
McCain said he is anxious about “Chinese trade practices” and “remains deeply concerned about cyber security and the continued espionage practices in cyber warfare that the Chinese practice.”
Another U.S. Senator, Democrat Mark Udall has been careful to not take any side, saying instead he trusts that the Canadian government will make the right – and safe – decision.
“We trust Canada, we trust your government,” he said. “If you, through your due diligence, decided this makes sense, this wouldn’t compromise your national security, I believe we would stand by the side of your government.”
Approving the deal could, however, have its benefits, the senator said.
“The more we are linked economically, I think the healthier it is for the world,” he said. “If you are passing goods and services across borders, you’re a lot less likely to send soldiers and ships.”
Security expert Roger Robinson:
Also from south of the border, former director of the U.S. National Security Council Roger Robinson highlighted the questions and concerns he thinks Canada should weigh heavily while making the decision, including the precedence approval might set.
“I think one has to be very concerned about the direction of this event. For example, if the Nexen deal is concluded, you can expect a queue of Chinese enterprises that are going to see the water as fine, and kind of have a green light to move into other priority resources,” he said.
The bid shouldn’t be considered in isolation, he said. Rather, “it should be viewed as a string of potential Chinese transactions, not just in the energy sector, but also in the telecommunications and other sectors of the economy.”
Businessman Jim Pattison:
Back in Canada, the country`s fifth richest man, Jim Pattison, approaches the decision from a different angle and describes it as “a very touchy deal.”
“I think that when a government, any government, buys an asset, their whole objectives are very different than your’s or mine or anybody else’s that’s in business,” he said. “First of all, their cost of capital is different. And secondly, their horizons, getting a return on that capital, are different.”
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