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Canada blocks Aecon sale

The federal government has blocked the proposed $1.5-billion takeover of Aecon Group Inc. by a Chinese state-owned company for reasons of national security.

After markets closed Wednesday, Economic Development Minister Navdeep Bains confirmed the government's decision to prevent CCCC International Holding Ltd. from acquiring the Aecon construction firm.

The Trudeau government had been warned by experts to proceed cautiously when weighing any investment bids by Chinese state firms and to be as transparent as possible in reviewing the proposed deal.

Ottawa announced a full national security review of the Aecon deal in February.

"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," Bains said in a statement.

"Based on their findings, in order to protect national security, we ordered CCCI not to implement the proposed investment," he said. "Our government is open to international investment that creates jobs and increases prosperity, but not at the expense of national security."

Aecon has a long history of participation in Canadian construction and engineering projects such as the CN Tower, Vancouver's SkyTrain, the St. Lawrence Seaway and the Halifax shipyard.

In a statement Wednesday evening, the Toronto-based firm said it was disappointed with the government's decision.

"Aecon is and will continue to be a leading player in the Canadian construction and infrastructure market," John Beck, Aecon president and CEO, said in the statement.

"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."

A representative of CCCI, which is a subsidiary of China Communications Construction Company Ltd., said Wednesday that it had no immediate comment about Ottawa's decision to block the takeover.

The Chinese government had been highly supportive of the potential Aecon takeover.

It remains to be seen how Ottawa's decision will be received by Beijing and how it could affect Canadian-Chinese relations.



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