July 24 (Bloomberg) -- Canadian Industry Minister Christian Paradis said his government’s review of Cnooc Ltd.’s proposed $15.1 billion agreement to buy Nexen Inc. has begun.
“The proposed deal will be subject to a review,” Paradis said today at an event in Montreal. “I made comments about this yesterday. If I made comments, it’s because a review is ongoing.”
Under Canadian law, Paradis has 45 days to make a decision on the merger, and can extend that deadline by another 30 days if more information is needed.
Paradis said the deal must be compliant with Canada’s foreign-investment law, which lists six criteria for judging if takeovers are in Canada’s interest, including the effect on employment in Canada and the impact on Canada’s ability to compete globally. The parties involved need to do their “homework,” he said.
“There is a law in place with six criteria,” he said. “It’s not up to the government to convince Canadians that there is a net benefit but this is for the stakeholders to do.”
Cnooc and Nexen “have to be compliant with the law, including our national security law,” Paradis said. “The companies, the stakeholders will have to do their homework.”
Paradis declined to comment on when he first heard of the proposed transaction. “There is a law in place. I can’t comment further on the process.”
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