The National Post is Canada’s second largest national paper.
Perrin Beatty is chief executive of the Canadian Chamber of Commerce.
‘We’ don’t own Nexen. Its shareholders do
When the Chinese National Overseas Oil Company (CNOOC) offered $15.1-billion to purchase Nexen Ltd., it seemed to be a highly positive event. The specific offer is very attractive — a 61% premium over the company’s stock price. The transaction will also grow the Canadian operation by 40% as additional North American assets are consolidated under the Calgary office.
Commitments to retain the Nexen brand, its operations and staff, as well as to list its shares on the TSX, are all welcome. (Of course, once listed, CNOOC will be bound by the market-transparency rules that govern the exchange. It will also be the single-largest listed entity on the TSX.)
Best of all, the deal signals success for Canada’s campaign to improve our commercial ties with China. This week, the government tabled the long-awaited Canada/China investment treaty, a critical step in establishing reliable commercial relations between the two countries.
But in recent weeks a familiar chorus of anxious voices has been heard again. It’s our national pastime: starting at every shadow, doubting ourselves, fretting and wringing our hands while others move decisively. Suddenly the press is full of questions like:
“What about reciprocity; should they be permitted to invest here while making it hard for Canadians to invest in China?”
“Aren’t the Chinese involved in industrial espionage?”
“Should we be selling a Canadian company to them?”
Of course “we” don’t own Nexen. Its shareholders do. They invested in the firm and now they want to sell at a profit, which 99% voted to do, last week. Their company has had a difficult year, struggling with a troubled oil sands development that will demand huge additional funds. The Dutch, American, French and Canadian companies surrounding Nexen could have made an offer, but they didn’t. CNOOC did.
Reciprocity is a nebulous goal. Let’s not forget there are areas of our own economy in which China would not be allowed to invest. The rules of the World Trade Organization, to which we are signatories, specifically permit countries to offer freedoms in some sectors and restrict others. Both China and Canada are doing that.
For the rest of this article, please go to the National Post website: http://opinion.financialpost.com/2012/09/28/time-to-prove-canada-open-for-business/