Chinese $15B Nexen oil takeover approved by shareholders

Nexen Inc. shareholders have overwhelmingly voted in favour of a takeover of the Calgary-based energy company by China National Offshore Oil Company.

Nexen shareholders approve CNOOC offer

11 years ago
Duration 4:55
A Chinese company is inching ever closer to taking over Canadian energy producer Nexen, after shareholders voted in favour of the $15.1B deal. Final approval is now in the hands of the Harper government.

Nexen Inc. shareholders have overwhelmingly voted in favour of a takeover of the Calgary-based energy company by China National Offshore Oil Company.

Some 99 per cent of common shareholders voted in favour of CNOOC's $27.50-per-share cash offer, and 87 per cent of preferred shareholders did so.

Because of the premium that CNOOC was offering, shareholder approval was largely a formality. But the $15.1-billion takeover still requires approval by the Canadian government under the Investment Canada Act.

Regulators are tasked with ensuring that the deal meets the nebulous "net benefit" test that tripped up BHP-Billiton's hostile takeover bid for Potash Corporation of Saskatchewan.

Government regulations require a ruling on the deal by mid-October, but that could be pushed back into November if necessary.

Calgary West MP Rob Anders said on Monday he opposes the takeover because China is a "non-benevolent country."

Minister of State for Finance Ted Menzies has said he's heard from people on both sides of the issue.

"I've heard many concerns, varying concerns, concerns about the resource industry, concerns about a foreign company investing in Canada," Menzies said earlier this week, according to Reuters. "We're hearing comments on both sides of the story, many supportive and certainly some that are concerned."

Prime Minister Stephen Harper has also said that China needs to show its state-run enterprises can be trusted to play by the same rules as Canada.

Nexen has offshore oil and gas assets around the world, as well as a stake in the Long Lake oilsands project in Alberta and shale gas operations in B.C.

With files from The Canadian Press