A Canadian federal cabinet has put the brakes on a potential takeover of a Canadian construction company by a Chinese corporation citing national security concerns.
The Order-in-Council was issued against CCCC International Holding Limited (CCCI) to halt the proposed acquisition of Canadian construction company Aecon Group Inc., pursuant to the Investment Canada Act.
Under the act, proposed acquisitions of a Canadian business by non-Canadian investors are assessed for possible national security concerns.
CCCI is a subsidiary of China Communications Construction Co., Ltd., which is 64 per cent owned by the Chinese government. Aecon is a major Canadian construction company involved in the design and construction of major transportation and infrastructure projects, the operation and servicing of major utilities and telecommunications facilities and the development of public-private partnership projects in Canada.
According to Mondaq, CCCI announced its proposed acquisition of Aecon on Oct. 26, 2017. The federal cabinet ordered a full-scale national security review in February of this year, which ended in the recent order to block the transaction.
Since the national security review process is less than transparent, it’s hard for the public to know what national security concerns led to the decision to block the transaction.