China Communications Construction Co Ltd (CCCC, 中國交通建設) is to acquire Canada’s Aecon Group Inc for C$1.51 billion (US$1.17 billion), the Canadian company announced on Thursday.
The deal is still subject to shareholder and regulatory approvals.
CCCC, one of the world’s largest engineering and construction groups, agreed to pay C$20.37 per share in cash for Aecon.
This represents a 42 percent premium on Aecon’s share price in late August, when the company announced it was seeking potential suitors.
The purchase would be made through CCCC’s overseas investment and financing arm, CCCC International Holding Ltd (中交國際控股), also known as CCCI.
Aecon would continue to be led by its current management team and its headquarters are to remain in Canada.
The takeover will give it access to “significant capital, complementary infrastructure expertise and an international network to support its growth ambitions,” CCCI president Lu Jianzhong (陸建忠) said.
Canadian Prime Minister Justin Trudeau said a review of the purchase under the Investment Canada Act would look to ensure the deal is “in the best interest of Canadians” in terms of jobs and effects on communities, “but also aligned with our concerns around security and safety.”
Large-scale Chinese investment in Canada is a relatively recent phenomenon and remains small compared to investment from the US and other foreign sources. Most of the buys over the past decade have been in the resource sector.
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