Dany Assaf comments on the Canadian government’s rejection of Petronas’ proposed takeover of Progress Energy Corp., in Bloomberg

Petronas Rejection Casts Doubt on Cnooc $15.1 Billion Bid

October 22, 2012

Canada’s rejection of a bid by Malaysia’s state oil company for Progress Energy Resources Corp. (PRQ) casts doubt on Beijing-based Cnooc Ltd.’s $15.1-billion takeover of Nexen Inc. (NXY) and raises questions about the openness of Prime Minister Stephen Harper’s government to foreign investment.

Industry Minister Christian Paradis said in a statement he wasn’t satisfied the C$5.2 billion acquisition by Petroliam Nasional Bhd., known as Petronas, is in Canada’s interest. Harper’s Conservative government reviewed the bid under its foreign takeover law, which says transactions must be judged to have a "net benefit" to Canada.

The government has been seeking more ambitious commitments from companies looking for approval of foreign takeovers, said Dany Assaf.

"When I first started practice in this area in the mid-90s, Investment Canada regulatory approval was really just a matter of process," Dany said in an Oct. 11 interview. "Today, the negotiations are more intense. Businesses are going to have to offer more."

Under the Investment Canada Act, the government reviews foreign takeovers valued at more than C$330 million.

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