Harper Says Cnooc-Nexen Must Be in Long-Term Interest

Cnooc Ltd.’s $15.1 billion bid for Nexen Inc. would have significant implications and must be judged to be in the long-term interest of the Canadian economy, Prime Minister Stephen Harper said.

“This is a significant transaction with significant implications for the Canadian economy both today and in the long term,” Harper told reporters in Cambridge Bay, Nunavut.

“Our government will take the time we have to properly scrutinize this transaction and to assess that, if it is to go ahead, that it will only go ahead if it is in the long-term interests of the Canadian economy,” he said.

The federal government must approve Beijing-based Cnooc’s offer for Calgary-based Nexen as it is more than the C$330 million ($332 million) threshold spelled out in Canada’s foreign-takeover law.

Harper was responding to a question about a poll commissioned by Sun News Network that shows a majority of Canadians want the government to reject the bid. Harper was also asked if the bid should be allowed, given that Canadian companies face limits on foreign investment in China.

“We do have significant and growing Canadian investment in China. But you do raise some important questions,” Harper said. “I think those considerations need scrutiny and they need some clear long-term policy directions.”

Harper also said that, “given that we are committed by legislation to review this and to review it on its merits, I’m not going to comment on the merits of the transaction today one way or another.”

The government has 45 days to review foreign takeovers once an application has been filed, and can extend the deadline by 30 days. Industry Minister Christian Paradis said yesterday he expects Cnooc to file the application “soon.”

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