Canadian Govt Blocks Aecon Sale To CCCI

May 24, 2018

[Updated] The Government of Canada has ordered Aecon –  the company involved in Bermuda’s airport project — to cease their planned sale to a Chinese company, with the Canadian Government saying the decision was made “in order to protect national security.”

CBC reported that Canada’s Innovation Minister Navdeep Bains said, “As is always the case, we listened to the advice of our national security agencies throughout the multi-step national security review process under the Investment Canada Act.”

“Based on their findings, in order to protect national security, we ordered CCCI not to implement the proposed investment.”

In a statement, Aecon said they were informed that the Governor in Council has issued an order under the Investment Canada Act directing CCCC  not to implement its proposed acquisition of Aecon, and “as a result, the Arrangement between Aecon and CCCI will not proceed.”

“While we are disappointed with the government’s decision, Aecon is and will continue to be a leading player in the Canadian construction and infrastructure market,” said John M. Beck, President and CEO, Aecon Group Inc.

“Through our proposed transaction with CCCI we had outlined a vision in which Aecon would be better able to compete with the many large global construction companies actively working in Canada.

“The deal offered considerable benefits to Aecon and its various stakeholders. While we have been prevented from pursuing the transaction, we are moving forward from a position of strength. Over the past several months Aecon has secured numerous large-scale projects, has a record backlog, and a significant pipeline of opportunities ahead of it.”

“Aecon will remain publicly traded on the Toronto Stock Exchange and its headquarters will continue to be in Toronto, with regional offices in Calgary and Vancouver. As would have been the case if the transaction had proceeded, management of the company is not expected to change. The company has reinstated its search for a new Chief Executive Officer. Mr. Beck will remain as CEO until his successor has been selected.

“Our dedicated board of directors, who were recently re-elected at Aecon’s May 10th Annual General Meeting, remain committed to providing ongoing guidance and governance to drive shareholder value and work in the best interest of the Company,” said Aecon Chairman Brian Tobin. “The board is also focused on the ongoing CEO search to select the right leader to guide the company in the future.”

“The Special Committee of the Board of Directors has been dissolved and, while Aecon’s Board considers strategic options in the best interest of the Corporation from time to time, Aecon is no longer actively pursuing a sale process.”

When the now-defunct deal was initially announced in 2017, Steve Nackan, President, Aecon Concessions and Chairman, Skyport, said, “It is business as usual at Aecon and on the Bermuda airport terminal construction project.

“This agreement will create value for our shareholders and enhance Aecon’s capabilities and growth potential, something that we’re very excited about. By joining the third largest construction company in the world, Aecon and Skyport will ultimately benefit from enhanced capabilities and financial resources. However, Aecon will remain a Canadian company.

“This sale will have no impact on the day-to-day of the construction of the new airport terminal or Skyport. The Aecon management team and friendly Bermudian Skyport employees will remain in place and the new airport will be completed on-time and on-budget with the guarantee of the Canadian Commercial Corporation. We look forward to delivering a state-of-the-art terminal in 2020.”

Update 2.18pm: President, Aecon Concessions Steve Nackan said, “Following the Canadian Government’s decision to decline CCC International’s proposed acquisition of Aecon, it is business as usual for Aecon.

“The airport agreement provides a solid platform for us to continue making great progress in delivering a world-class airport that Bermuda can be proud of.

“Our strong market position, industry partnerships, and outstanding employees will continue to drive our success.”

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Comments (31)

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  1. The Original Truth™ says:

    This is vary bad for Bermuda. Aecon is stretched thin & Trudeau has just blocked their chance of holding their own. Not sure what Aecon will do now to keep their company going. Shareholders & clients are shafted now.

    • Wahoo says:

      How do you come to that conclusion?

      • Now come on, if PLP were under this scrutiny you would be blowing ya trumpet harder.

      • The Original Truth™ says:

        The reason Aecon put themselves on the market is that they have grown as far as they could. They were looking for someone bigger to help the company to continue to grow. They are finding it hard to compete with bigger international companies. The CCCI acquisition was the way to compete. They explained this to the Canadian government but they still blocked the acquisition. They’re waiting on a lot of backlog revenue like Skyport and other projects. They needed the growth to keep going while they wait to get paid.

        • Thats not what SpongeBob told us.

        • Question says:

          And yet they awarded nearly $1bn in new contracts last quarter.

          The crap you people talk. Ignorant nonsense.

          • The Original Truth™ says:

            They were awarded $910 million in contracts last quarter. That’s $100mil less than $1b which isn’t nearly $1b.

            Just looking at a company’s receivables will not tell you the whole picture. Especially when they have a hard time getting their clients to pay them. Public company’s don’t try & sell themselves unless something is wrong. They are a great company but they don’t have the compacity to grow any further. While they wait for money to come in they still have billions of dollars in expenses to pay. The Harper government has allowed bigger foreign companies like ACS to come in and take jobs from them. The Canadian government had a civil service crown agency company Metrolinx created that Aecon now has to work & share profits with when building Toronto’s public transport infrastructure. They needed these jobs to keep their head above water.

            Aecon’s Infrastructure revenues are down 13%y/y

            Aecon’s energy revenues decreased 7.8%y/y driven by lower fabrication, module assembly, and field construction activity in western Canada.

            Aecon’s mining revenues declined 47% y/y reflecting a lower volume of site installation work.

            They went from $686M in Q2 2017 to $543.0M in Q1 2018

            • nerema says:

              You’re talking crap. Their net income in 2017 was $339m, up from $96m the year before.

            • Question says:

              Well you’re going to be a d!@k about exact numbers, $910m is not $100m less than $1bn.

              Anyway, it looks like you’re too stupid to discuss it sensibly.

    • nerema says:

      So you think the Canadian government did this to protect the Chinese company from making a poor investment?


      Back in the real world, Aecon has a backlog of $4.6bn, and there were $910m of new contracts awarded to Aecon in 1Q18.

      So tell us why “This is vary (sic)bad for Bermuda”. I like a good laugh.

      • The Original Truth™ says:

        The Canadian government did it because they listened to their clueless security minister. The CEO of Aecon has proven there wasn’t any security danger. SNC-Lavalin is more of a security concern charged with bribery multiple times. This was a power play by the bigger companies to keep Aecon from competing. They are the ones who pushed this investigation more than anything else. The CEO has spoken about the entry of multi-national construction firms into Canada that are threatening ARE’s ability to compete.

        You want to be petty & poke at me mistyping an a instead of e but you’re the one dense enough to think that backlogs & contracts matter when it comes to being able to survive at present. All that is just an IOU that could possibly not materialize. Aecon has been waiting for years for the Canadian government to pay them back. Ecuador already backtracked on their airport deal when a new government was elected leaving Aecon at a loss while the Quito Airport was built & making a profit for Ecuador.

        If you will play on the mistype of the word vary then, yes it does vary from bad to worse. Aecon needs investors but this news just caused many investors to dump their investment causing Aecon’s stock to plunge 14% to an extremely low $14PS for a company this big. This dip proves that the institutional investors are doubting Aecon’s ability to recoup. $4.6bn is a huge outstanding amount. You can’t pay for building a BDA airport with backlogs & contracts.

  2. Richardson says:

    Bob Richards, tell me what you think of this development.

    • Lol says:

      Nothing. He not going to say anything and neither are the regular oba trolls. I hear an “I told you so” coming soon.

      • Question says:

        It was irrelevant that they wanted to buy Aecon, and it’s irrelevant that they won’t buy Aecon. It doesn’t affect our contract one iota.
        You PLP people have trouble understanding the most basic things.

        • The Original Truth™ says:

          Aecon wanted to be bought & put themselves on the market. This is relevant because Aecon needed to be bought to keep going. Aecon needed it to happen but the Canadian government said no. If Aecon keeps loosing revenue like they are doing & can’t grow how do you think they will be able to afford the BDA Airport project?

          • SMH says:

            “how do you think they will be able to afford the BDA Airport project?”

            It’s packet change to AECON. Your self importance is laughable.

    • RIP oba/UBP says:

      You mean Bob the Destroyer of Bermuda. The people told him but he and the other fools we kicked out didn’t listen to the green crew.

  3. Pepper Spray Pepper Spray Pepper Spray Peppee Spray Pepper Spray Pepper Spray

    • Dr. Pepper says:

      They oughta peepee spray you. How did your “meeting” go today?

  4. Izzypop says:

    Why don’t that so called local company who wanted to build the airport come in and buy the airport contract from Aecon

  5. cpm says:

    Have you worked out the name and hue of the Officer who ordered action against an unruly mob blocking Parliament hiding behind old people and children?

  6. mumbojumbo says:

    Pure and utter posticulation and posturing…national security? Whos’?
    Canada’s border should be monitored via satilight as their approach to security is that lax.
    To propone “in the interest of…” Is only
    Implication…and covetting, after the realisation hit (probably as an after thought),post haste, oh my…China is capable of working this through!
    A typical Canook greed and covetting set in …since when does Canadian govt. decide national security of another country? England decides our national security not you Canada.

    I speculate aceon be hoarding.

    • The Original Truth™ says:

      It’s Canada’s national security Canada is worried about not BDA’s. They could care less about some other country’s. They didn’t want a China state owned company to buy a Canadian company that has access to their nuclear & telecommunications infrastructure in Canada. It’s Trump paranoia that has crept across to the north that Chinese have some world domination plan.

      They didn’t let this deal go through but they are fine with Kinder Morgan pumping oil across Canada when KM has a history of leaks that have polluted First Nation water supplies & caused fatal explosions. It’s the Canadian government who is hoarding while Aecon wants what’s best for them & their client’s including Bermuda. They need the deal to compete but the Canadian government is being as many like to put it xenophobic.

      Bad move for Canada since China is already feeling insulted by Trump & now them. China has already voiced their disappointment saying Canada needs to not let prejudice get in the way of free trade.

    • SMH says:

      mumbojumbo……I’m glad you pre-tagged your posts with an indication of their content :)

    • SMH says:

      “since when does Canadian govt. decide national security of another country? ”

      Wow! You really are too stupid to understand what’s happening. I’d suggest you quiet down, you only reveal your ignorance.

  7. mumbojumbo says:

    Now look here Canada…England decides our national security you are overt and misguided to say otherwise.
    China is business opportunity.
    What you are doing now aecon is in my humble opinion …post haste hoarding and covetting.

  8. Real Deal says:

    See i knew what i was talking about