Market Outlook – Are foreign takeovers of our resource sector good or bad?
The Feds have approved CNOOC Ltd.’s $15.1-billion (U.S.) takeover of Nexen Inc. and Petronas’ $6-billion (Canadian) acquisition of Progress Energy Resources Corp. These deals are certainly good for stockholders in these two companies, but are they good for Canada? For years our government has said that foreign must provide a net benefit to Canadians. Of course the Feds have never specifically defined the net benefit test, because it’s virtually impossible to do. The reality is that Canada need billions of dollars to develop its natural resources. Partnering with foreign investors is one way to accomplish this goal.
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