Here are the top reads from the Aecon blocked deal and the rest of our deals and financial services coverage of the past week. Have a great weekend.
AECON
Analysis: This week’s decision by Ottawa – a hard ‘no’ to the deal – left an obvious set of winners and losers. But it did little to clarify what, exactly, Canada’s policy is when it comes to accepting offers of capital from the world’s second-largest economy, which is also our second-largest export market. Story (Jeffrey Jones, for subscribers)
Trade: The Trudeau government’s rejection of a Chinese takeover of Aecon Group Ltd. won’t derail free trade talks with China, but other factors – a shakeup in China’s ruling Communist Party and the trade dispute between Beijing and Washington – are weighing on the progress of the talks, federal officials say. Story (Robert Fife and Steven Chase)
Latest headline: Prime Minister Justin Trudeau says his cabinet vetoed a Chinese state-owned conglomerate’s takeover of one of Canada’s largest construction companies because of concerns it could control critical infrastructure projects and threaten Canadian sovereignty. Story (Robert Fife and Steven Chase)
Opinion: The federal government has two powerful tools for denying a foreign takeover – a national security review and the net benefit test. Unfortunately, Ottawa invoked the wrong reason for blocking China Communications Construction Co.’s $1.5-billion bid to buy Toronto-based Aecon Group Inc. Story (Barrie McKenna, for subscribers)
Outlook: Its planned marriage to a Chinese suitor blocked, construction company Aecon Group Inc. pledged on Thursday to remain independent and capitalize on a string of recently awarded contracts. Story (Andrew Willis, for subscribers)
Analysis: It could well be that Canada never decides what it really wants from China. With its decision to block a $1.5-billion takeover of Aecon Group Inc., the construction company, by China Communications Construction Co. Ltd. (CCCC), the federal government has shown that its frequent assertions that it welcomes Chinese investment have some rather crucial caveats. Opinion (Jeffrey Jones, for subscribers)
Analysis: China may soon be the world’s largest economy. Canada is a trading nation that seeks foreign investment. For decades, now, Liberal governments have courted Chinese favour, have sought access to its market of more than a billion people, have welcomed its capital. Canada is typical of Western nations in looking upon China this way. But attitudes are changes. Opinion (John Ibbitson, for subscribers)
Explainer: The federal government blocked the sale of Canadian construction giant Aecon Group Inc. to a Chinese state-owned enterprise on Wednesday – a move that could have repercussions over trade between the two countries. Here are six things you need to know about the decision. Story (Matt Lundy)
Reaction: The Chinese government has warned Canada to “abandon prejudices” against Chinese companies, after Ottawa blocked the acquisition of construction company Aecon Group Inc. by China Communications Construction Co. Ltd, a state-owned firm. Story (Nathan VanderKlippe)
FROM THE REST OF THE WEEK
RBC and TD earnings: Rapidly growing profit from Canadian retail and business banking has helped Canada’s two largest banks escape the drag from a slower mortgage market. Story (James Bradshaw)
CIBC earnings: Canadian Imperial Bank of Commerce’s second-quarter profit rose sharply as better results from the bank’s key businesses more than offset notably slower growth in its mortgage portfolio. Story (James Bradshaw)
Regulation: Canada’s anti-money laundering watchdog is looking at ways of reducing the regulatory burden facing smaller financial institutions, the agency’s new director and CEO said on Thursday. Story (Alexandra Posadzki, for subscribers)
REITs: In a sudden twist, real estate investment trusts are falling back into investors’ favour, resulting in a rare resurgence of initial public offerings -- all in the face of rising interest rates. Story (Tim Kiladze, for subscribers)
Executive appointment: The Canada Infrastructure Bank landed veteran pension plan investor Pierre Lavallée as its first chief executive on Thursday, paving the way for the $35-billion agency to begin breaking ground on long-promised projects. Story (Andrew Willis, for subscribers)
Executive Pay: Eldorado Gold Corp. is once again attracting criticism for excessive executive compensation, a year after the mining company lost a shareholder “say-on-pay” vote. Story (Niall McGee, for subscribers)
Top Talent: Robo-adviser Wealthsimple is boosting its line of business for financial advisers with the addition of prominent wealth management executive Jean-Francois Courville. Story (Clare O’Hara, for subscribers)
Deloitte: One of the world’s largest accounting firms is hiring its first-ever chief economist in Canada, the latest sign that financial-services firms feel the pressure to evolve for a new era. Story (Tim Kiladze, for subscribers)
Operation Cryptosweep: Ontario’s securities watchdog says it took part in “Operation Cryptosweep,” a joint initiative involving North American securities regulators to crack down on fraudulent cryptocurrency-related investment schemes. Story (Alexandra Posadzki)
Railway: A Calgary-based group, iChurchill Inc., has walked away from efforts to purchase northern Manitoba’s Hudson Bay Railway and Port of Churchill from Denver-based Omnitrax, blaming the federal government’s focus on selling the properties to Fairfax Financial Holdings Ltd. Story (Eric Atkins and Jacqueline Nelson, for subscribers)
Bombardier: Bombardier Inc.’s financial prospects have been quietly taking flight, and if Bay Street bankers have it right, the Caisse de dépôt et placement du Québec is planning to cash in a winning wager on the transportation company. Bombardier’s stock price has doubled over the past year; a company that a few years ago was on the financial brink suddenly finds itself flush with cash. Story (Andrew Willis, for subscribers)
FRIDAY FINANCIAL SERVICES AND DEALS NEWS WRAP
Fintech: Kenya built a reputation as a pioneer of financial inclusion through its early adoption of a mobile money system that enables people to transfer cash and make payments on cellphones without a bank account. Story
India: Prem Watsa, the billionaire head of Fairfax Financial Holdings Ltd., sees plenty of opportunities for investment in the U.S. and his native India. He’s less interested in the other Asian powerhouse. Story
IPOs: The initial public offering of Saudi Aramco will “most likely” happen in 2019, the kingdom’s oil minister said on Friday, confirming a delay for what’s likely to be the world’s largest ever share sale. Story
Politics: Kushner Cos. is leaving Philadelphia with the sale of its only asset in the city, a stake in an apartment-and-retail complex with a party-ready courtyard. The real estate firm once run by presidential son-in-law Jared Kushner sold its portion of Schmidt’s Commons, a 10-building complex in the Northern Liberties neighborhood, for US$44.1 million, according to the buyer, Post Brothers. Story
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