State owned Chinese construction firm, China Communications Construction Co. (CCCC) agrees to buy Toronto based construction company Aecon Group Inc. for CA$1.45 billion ($1.13 billion).
Aecon is Canada’s largest publicly listed infrastructure construction company. In light of this proposition, the Canadian Government’s regulatory approval as well as a vote of Aecon’s shareholders would decide the future of the company.
As per Aecon’s press release, the Construction Company’s board of directors have been in search for a buyer and openly welcomed the newly made proposition by the Chinese Construction firm. The company further stated that the board has unanimously called for the shareholders to approve this takeover during their meet, scheduled in December.
CCCC places a total value of CA$20.37 per share on all of Aecon’s shares. This 42% premium was placed on the closing price of Aecon just a day before the deal was publicized.
The Chinese Construction Company, listed in Hong Kong and Shanghai is eagerly awaiting the buyout which would give CCCC “a strong presence” in the thriving Canadian market. The filing further stated that the Toronto Based Construction Company Aecon would keep hold of its name and operations at the Canadian headquarters as well as the management team even after the takeover by CCCC.
CCCC has expanded its presence overseas in the past years and is now eyeing the “attractive Canadian market”. It reportedly bought the Australian Construction firm John Holland Group in 2015 for a total sum of $879 million. It also bought the U.S. Engineering Company Friede Goldman United Ltd in 2010 for $125 million. It has now set eyes on Canada’s largest publicly listed infrastructure construction company Aecon.
Upon approval, Toronto based Construction Company Aecon will become a complete subsidiary of CCCC’s overseas investment unit. Speaking in a Hong Kong Stock Exchange filing on Thursday, CCCC said Aecon will ultimately be delisted from the Toronto Stock Exchange if the proposed deal takes effect.
Benjamin Diaz started working for Debate Report in 2017. Ben grew up in a small town in northern Ontario. He studied chemistry in college, graduated, and married his wife a year later. Benhas been a proud Torontonian for the past 10 years. He covers politics and the economy. Previously he wrote for CTV News and the Huffington Post Canada.