CNOOC's Nexen bid: Shareholders approve $15.1bn deal

China's CNOOC wants to boost its domestic oil reserves China has been keen to increase oil resources amid a growing domestic demand

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Shareholders of Canada's Nexen have approved the takeover bid by China's state-owned CNOOC to acquire the firm in a $15.1bn (£9.3bn) deal.

CNOOC had offered to pay $27.50 cash per share for Nexen in July, a 60% premium on its share price at the time.

However, the deal still needs to be approved by the Canadian government which has launched a review to assess its benefit to Canada.

If approved, the deal will be China's largest foreign business takeover.

"The offer is a compelling one, and offers benefits for all Nexen's stakeholders, including employees and communities," CNOOC spokesman Peter Hunt was quoted as saying by the Associated Press news agency.

"CNOOC Limited will continue to pursue all regulatory approvals required to close the transaction."

'Very concerned'

While Nexen shareholders have backed the deal, there seems to be growing opposition to it among politicians and even the general public in Canada.

Start Quote

This transaction will in no way close the book on Nexen or our way of doing business”

End Quote Kevin Reinhart Nexen

Canada's biggest opposition party, the New Democratic Party (NDP), has voiced its concerns over the deal.

"We're very concerned about the potential sale of a strategic Canadian asset, not only to a foreign enterprise, but one that is wholly controlled by a foreign government that doesn't follow the same market rules as Canada," said Thomas Mulcair, leader of the NDP.

"The question is how can it be in Canada's interest, how can it be of a net benefit to Canada, to sell a strategic natural resource to a corporation that is wholly owned by a foreign country?"

Meanwhile, according to a latest survey conducted by Abacus Data, 69% of Canadians are also against the deal, while only 8% approve of it, with the rest being unsure.

"A majority of those opposed to the deal (58%) cited the fact that Nexen operates in one of Canada's core strategic industries, and a foreign company should not have control of such an important resource," Abacus Data said.

Mr Mulcair added that the survey indicated that "Canadians share our concerns".

Commitment to Canada

Canada's government has the right to block any foreign investments over 330m Canadian dollars if it believes they are not in the country's best interests.

CNOOC, which is China's biggest offshore oil producer, has made commitments to ensure the authorities that the deal will bring benefit to the country.

It has said that it will retain Nexen employees and make Nexen's Calgary office as its headquarters for North and Central America. It has also offered to list shares on the Toronto Stock Exchange.

Kevin Reinhart, Nexen's interim chief executive, said the Chinese firm also wanted to keep the Nexen brand name.

"This transaction will in no way close the book on Nexen or our way of doing business," he said.

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