Canada blocks $5bn Petronas bid for Progress

City A.M. Reporter
CANADA insisted over the weekend that it still invites foreign investment in natural resources despite its surprise rejection of a C$5.17bn (£3.25bn) takeover of Progress Energy Resources by Malaysia’s Petronas, a deal that had been expected to pass muster easily.

The rejection late on Friday of the buyout of Progress, a natural gas producer, has sparked criticism from some investors about perceived protectionism and raised questions whether the larger and more controversial bid for Nexen Inc by China’s CNOOC has a chance of being approved.

“Canada has one of the best investment climates in the world and a long-standing reputation for welcoming foreign investment,” said a spokeswoman for industry minister Christian Paradis, who blocked the Petronas bid minutes before the deadline for a decision.

“Canada has a broad framework in place to promote trade and investment, while at the same time protecting Canadian interests. Our government welcomes foreign investment that benefits Canada,” Stastny said in an email.

Progress chief executive Michael Culbert said he was disappointed with the ruling and his company would take the next month to try to determine what concerns led to the rejection and what potential remedies might assuage them.

Petronas declined to comment on the failed bid.

The Petronas deal attracted scrutiny after CNOOC made its bid for Nexen.

Some members of Canada’s governing Conservative Party are wary of the CNOOC offer, in part because of what they say are unfair Chinese business practices.