China minister asks Canada be fair with state firms

Tue Sep 25, 2012 1:27pm EDT
 
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By Julie Gordon

TORONTO (Reuters) - China's minister of commerce said on Tuesday that the country's state-owned companies act as corporations and obey local laws as he asked Canadian regulators to make a "fair and objective" analysis of their involvement in acquisitions.

Chen Deming spoke as Canada studies CNOOC Ltd's planned $15.1 billion acquisition of Nexen Inc.

While he did not specifically mention the proposed deal in a speech to a Toronto business audience, Chen said the country's state-owned corporations, which include CNOOC, do not operate any differently than privately owned companies.

"I hope our Canadian colleagues can have a very fair and objective analysis of these companies," Chen said.

The deal, if completed, would mark the first outright takeover of a large Canadian energy producer by a Chinese state-owned enterprise.

Although Canada is seeking substantial foreign investment in its oil and gas industry, CNOOC's proposed acquisition is raising concern inside the federal cabinet, where some members are wary of letting a Chinese state-owned enterprise buy up domestic assets.

Industry ministry officials are looking closely at the bid to determine whether it is of net benefit to Canada.

Nexen shareholders approved the $27.50 per share offer, a 61 percent premium, last week but the shares have been trading well below the offer price due to concerns that public opposition will convince the government to block the deal.

Nexen shares were down 5 Canadian cents to C$24.72 by early afternoon on the Toronto Stock Exchange.

(Writing by Scott Haggett; Editing by Jeffrey Hodgson)