Canada to Study Cnooc Deal for Another 30 Days
Canada today said it would extend its review of the $15.1 billion bid by Cnooc Ltd. (NYSE: CEO) for Canada's Nexen Inc. (NYSE: NXY). The delay was already baked into the timeline for approval of the deal, which Cnooc formally requested at the end of August.
Under Canadian law, the government has 45 days to consider whether or not the acquisition offered a "net benefit" to Canada, and could apply for one 30-day extension. The combined 75-day period ends in mid-November. Further delays are possible with the approval of Cnooc.
Canadian Prime Minister Stephen Harper has supported the acquisition of some of the country's natural resources by China, but has been wary of the proposed takeover of Nexen, which holds about 10% of its assets in the U.S. The U.S. and China must both approve the deal, and there is bipartisan opposition in the U.S. The government of China, which owns a controlling stake in Cnooc's parent company, is virtually certain to approve the deal.