OTTAWA – Canada’s junior finance minister says he’s getting a lot of negative feedback about the proposed takeover of Canadian oil producer Nexen Inc. by a state-owned Chinese firm.
Ted Menzies, who is from Alberta, said Tuesday there’s been plenty of interest among constituents and fellow Conservative MPs over the controversial $15.1-billion bid for Nexen(TSX:NXY) from China National Offshore Oil Corp.
And while some are expressing enthusiasm, the majority are expressing concern about the deal.
“We’re hearing comments on both sides of the story, many supportive and certainly some that are concerned,” he said.
“What I’m hearing is more concern rather than actually not understanding the issues.”
Menzies said the concerns were both of a general nature regarding the industry as a whole, and those focused on the takeover from what he termed “a foreign company.”
Ottawa announced late last month it had launched a required 45-day review of the transaction under the Canada Investment Act, meaning a decision should be known sometime in November, unless a 30-day extension is requested.
The issue was front and centre in the House upon the restart of Parliament on Monday, with NDP critic Peter Julian calling for public hearings on the issue. The NDP and Liberals also want the government to more clearly spell out how it applies the “net benefit” test on foreign purchases.
One concern is that China, flush with foreign cash accumulated from decades of trade surpluses, is using the Nexen deal as a precedent for future purchases in Canada’s oil patch.
Conservative MP Rob Anders said he opposed to the takeover, calling China a “non-benevolent country.”
Ministerial statements have suggested the takeover will need to clear a higher hurdle than most takeovers, including assurances that the acquiring Chinese firm, CNOOC, will operate Nexen along market lines.
Another consideration is that rejection would send the wrong signal to Beijing at a time when Ottawa is attempting to negotiate a mutual investment deal and exploring closer economic integration — including a free trade agreement — with the world’s second largest economy.
Industry Minister Christian Paradis said Monday that issues would be “scrutinized closely.”
Menzies said the deal will be judged on its merits, but noted that Canada has an open economy.
“Canada is open for business. We are a trading nation and we have investors who want to invest in companies in Canada, whether it’s the resource sector or the finance sector,” he said.