This past week, we saw the market impact of Investment Canada’s decision to initially reject PETRONAS’ (the Malaysian State-owned Enterprise) proposed takeover of Progress Energy Resources, a Canadian oil and gas company. In order to approve a takeover of a Canadian company, Investment Canada requires sufficient evidence of a ‘net benefit’ to Canada.
While this net benefit test is, at the moment, quite vague, the broader issue is the takeover of Canadian companies by SOEs with an even higher profile case in that of CNOOC/Nexen. Of course, this issue is not directly relevant to the U.S., but what are your thoughts on takeovers by SOEs in general? Should they be treated like any other corporation – ExxonMobil for example? And for my fellow Canucks out there, what are your thoughts on selling our resources to SOEs?