The Government of Canada has blocked the $1.5 billion sale of Aecon Group Inc. (Aecon) to China Communications Construction Company International Holding Limited (CCCI).
Minister of Innovation, Science and Economic Development Navdeep Bains issued a statement that:
“In accordance with the Investment Canada Act, the Government of Canada reviewed the proposed acquisition of Aecon by CCCI.
“As is always the case, we listened to the advice of our national security agencies throughout the multi-step national security review process under the Investment Canada Act.
“Based on their findings, in order to protect national security, we ordered CCCI not to implement the proposed investment.
“Our government is open to international investment that creates jobs and increases prosperity, but not at the expense of national security.”
In a release from Aecon, company president and CEO John Beck stated: “While we are disappointed with the government’s decision, Aecon is and will continue to be a leading player in the Canadian construction and infrastructure market. Through our proposed transaction with CCCI we had outlined a vision in which Aecon would be better able to compete with the many large global construction companies actively working in Canada. The deal offered considerable benefits to Aecon and its various stakeholders. While we have been prevented from pursuing the transaction, we are moving forward from a position of strength. Over the past several months Aecon has secured numerous large-scale projects, has a record backlog, and a significant pipeline of opportunities ahead of it.”
The same release also provided a glimpse of the next steps that the company will be taking in light of rejected sale, noting that the company is no longer actively pursuing a sale process. The Special Committee of the Board of Directors has been dissolved, and Beck will remain as the company’s CEO until a successor has been found.
“The board is […] focused on the ongoing CEO search to select the right leader to guide the company in the future,” said Brian Tobin, Aecon’s Chairman.