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CNOOC takeover of Nexen approved by shareholders

Published:  21 Sep at 9 AM

Chinese oil giant CNOOC could soon take control of Canada’s Nexen after shareholders approved a take over bid worth $15.1 billion. However, the deal is meeting with opposition from Canadian politicians and residents who do not believe that the country should hand its natural resources over to a wholly foreign owned firm.

In July CNOOC said it would pay $27.50 per share which was a 60 per cent premium on prices at the time. Peter Hunt, a spokesman for the China state owned company said that the deal was compelling and would result in benefits for stock holders and local communities.

Leader of Canada’s New Democratic Party, Thomas Mulcair, has voiced his opposition to the deal claiming that it is not in the country’s interest to surrender a strategic natural resource to a government which does not work to the same rules as Canada.

A survey by Abacus Data also reveals that nearly 70 per cent of Canadians do not agree the deal should go ahead. Of those who are opposed, 58 per cent said they did not believe that a foreign company should be given control of such an important core strategic industry.

Nexen’s interim chief executive, Kevin Reinhart, said the deal would not result in any job losses and that CNOOC had said it would establish its new head office for North America and Canada at Nexen’s Calgary headquarters.