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China's CNOOC clears final hurdle for $15.1-billion Nexen takeover

A cyclist rides past a gas station of CNOOC (China National Offshore Oil Corporation) in Zhoukou city, central Chinas Henan province, in this file photo.

Hou wei zk/THE CANADIAN PRESS

Nexen Inc. has cleared all hurdles in its $15.1-billion (U.S.) deal to be acquired by CNOOC Ltd. after clinching U.S regulatory approval.

The Calgary-based global oil and gas company said Tuesday it has received approval from the Committee on Foreign Investment in the United States, or CFIUS, which had been closely studying the transaction.

Late last month, Chinese giant CNOOC and Nexen extended a deadline to complete the takeover as they awaited U.S. approval.

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The largest Chinese overseas takeover in history, the deal had already been approved by regulators in Canada, the United Kingdom, the European Union and China.

CFIUS's mandate includes assessing the impact of financial transactions on U.S. security, a review that turned out to be lengthy in the case of the CNOOC takeover.

State-owned CNOOC was forced to withdraw and refile its application after an initial 75-day review window expired in November.

The CNOOC deal prompted widespread discussion about China's role in the Canadian energy industry.

As it approved the Nexen takeover, the Canadian government issued rules that largely block further acquisitions in the oil sands sector by foreign state-owned enterprises.

Shares of Nexen added 56 cents to close at $27.43 on the New York Stock Exchange, close to the $27.50-per-share offer price.

Some of Nexen's production – on the U.S. Gulf Coast – is politically sensitive.

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There has been speculation from some observers that Nexen might have to dispose of some of its U.S. assets in order for the deal with CNOOC to go through, especially given the vigilance the United States has shown regarding Chinese investment in areas of security concern such as energy and telecommunications.

Nexen did not say in its news release if Washington imposed any conditions, and the company didn't respond to requests for further comment.

The company said the transaction is expected to close the week of Feb. 25 and that it's subject to the usual closing conditions.

With file from reporter Shawn McCarthy in Ottawa.

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More

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