Ottawa extends deadline of ruling on Progress Energy's $6B Malaysian takeover
While a Chinese company's $15.1 billion deal to buy Calgary company Nexen Inc. has been grabbing headlines, Ottawa has quietly been weighing another major foreign takeover of a Canadian energy firm.
In late June, Malaysia's Petronas announced a $5.5 billion deal to acquire Calgary-based Progress Energy Resources Corp. — its partner in B.C. shale natural gas development.
The offer, which was later raised to $6 billion to fend off a competing offer, was accepted by Progress shareholders in August.
A press release out Friday confirms Ottawa is extending a review of the proposed takeover of the Canadian company. Progress says the government and Petronas have agreed to the extension under the Investment Canada Act, where the deal will have to pass the "net benefit" test in order to get approved.
'Net benefit' test
"This particular transaction raises a range of difficult policy questions, difficult and forward-looking issues," Prime Minister Stephen Harper said of the Nexen deal Thursday.
The deal is expected to close about three days after the government approves the transaction.
Harper made his remarks shortly after the NDP formally declared its opposition to the Nexen takeover, even though as the official Opposition it doesn't have the power to block the transaction.
"We've certainly seen the opinion polls moving over the last month, as well, showing more and more opposition by Canadians to this takeover," said Peter Julian, the NDP natural resources critic.
Harper has said the Nexen deal "raises a range of difficult policy questions, difficult and forward-looking issues."
The current review period for China National Offshore Oil Co.'s proposal to buy Nexen ends Oct. 12 but can be extended by up to a month.
In 2010, the Conservative government blocked a hostile takeover offer for Potash Corporation of Saskatchewan by BHP Billiton after opposition from Saskatchewan Premier Brad Wall.
The potash deal was the second foreign takeover blocked by Conservatives.
U.S. defence contractor Alliant Techsystems Inc. was prevented in 2008 from buying the space technology business of MacDonald, Dettwiler and Associates Ltd.