National security concerns said to have prompted government action
The planned takeover of Canadian construction firm Aecon by a unit of China Communications Construction Co. has been blocked by the Canadian government.
It’s reported that Ottawa acted due to national security concerns.
A statement from innovation minister Navdeep Bains, seen by Bloomberg, says that the government had “listened to the advice of our national security agencies throughout the multi-step national security review process under the Investment Canada Act,” and had therefore ordered CCCC not to implement its proposed investment.
Aecon says that it is disappointed in the government’s decision as it was part of a vision to enable Aecon to better compete with large global construction firms operating in Canada; but it says that the firm will remain a leading player in the industry.
Record backlog, strong business growth
"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," said John M. Beck, President and Chief Executive Officer, Aecon Group Inc.
That backlog totalled $4.6 billion at the end of Q1 2018 including $910 million of new business awarded in that quarter.
"Our dedicated board of directors, who were recently re-elected at Aecon's May 10PthP Annual General Meeting, remain committed to providing ongoing guidance and governance to drive shareholder value and work in the best interest of the Company," said The Hon. Brian V. Tobin, P.C., O.C., Aecon's Chairman. "The board is also focused on the ongoing CEO search to select the right leader to guide the company in the future."
