COLUMN-Petronas burned by Canadian nationalism; JVs may be salve: Clyde Russell
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
By Clyde Russell
SINGAPORE, Oct 23 (Reuters) - Petronas and other state-owned companies from nations not necessarily friendly to the West are going to have to learn to play a smarter game if they want to acquire strategic assets such as oil reserves.
The real lesson from the surprise rejection of the Malaysian national oil company's takeover of Progress Energy Resources Corp isn't that Canada is closed for business; it's that the traditional model of capitalist mergers and acquisitions is changing in Western democracies.
While Petronas and Progress Energy are trying to work out ways to salvage the $5.2 billion deal, concern has been raised that Canada may also nix the $15.1 billion takeover of Nexen Inc by China's state-controlled CNOOC Ltd.
What both these deals have in common is that they are full acquisitions of energy assets, a sector that is strategic, and probably more easily subject to national interest and resource nationalism arguments.
There seems to be a recent trend of Western, capitalist countries rejecting full takeovers of such assets, with Australia another example.
But, while full takeovers valued in billions of dollars appear to be struggling, joint venture investments seem to be flourishing. Continued...