Aecon’s $1.5bn sale to Chinese firm blocked over Canadian national security concerns
The Canadian government has blocked a $1.5bn takeover attempt of Aecon by China Communications Construction Company International Holding Limited (CCCI), citing advice given to them by its security agencies.
CCCI and Aecon, a large provider of construction and infrastructure services across Canada, had agreed terms on a deal, before the announcement from Canadian Economic Development Minister Navdeep Bains.
Bains said in a statement: “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. Our government is open to international investment that creates jobs and increases prosperity, but not at the expense of national security.”
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The announcement was met with disappointment from both the Chinese and Aecon.
John M. Beck, President and Chief Executive Officer of Aecon, commented: “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.”
The move by the Trudeau administration could disrupt its attempts to boost trade with China, which has responded bluntly to announcement.
The Chinese embassy in Canada reportedly reacted by warning the decision would “seriously undermine the confidence” of investors.
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.
217,000 extra workers needed to meet COVID-19 recovery
As the construction industry’s recovery progresses, the Construction Industry Training Board’s (CITB) Construction Skills Network (CSN) forecasts have led the organisation to believe the industry will reach 2019 levels of output in 2022.
The CSN says there will be an increase in the number of construction workers in “most English regions” by 2025, with demands forecasted at a 1.7% rise for the East Midlands, and a 1.4% rise for the West Midlands.
Scotland and Wales are also predicted to see a surge in demand for construction workers with a total increase of 1.4% and 0.7% respectively. The North East is the only region to see a slight decline in workforce demand at -0.1%.
Wood and interior fit-out trades among the most desirable during COVID-19
According to CSN’s forecast, the trades that are the most wanted are those of wood and interior fit-outs, with both requiring around 5,500 workers per year. Other in-demand trades include technical staff and other construction professionals, requiring 5,150 workers each year, construction managers at 3,600, and the electrical installation trade, which requires 3,400 staff per year.
There is also expected to be demand for 7,850 non-construction, office-based professionals and technical and IT support staff each year. Steve Radley, Policy Director at CITB, said: “It’s great to see construction coming back so strongly and creating lots of job opportunities.
“We need to adopt new approaches to meet these growing skills needs and deliver these quickly. We are working closely with the government and FE to build better bridges between FE and work and make apprenticeships more flexible. We are also making significant investments in supporting work experience that make it easier for employers to bring in new blood.
“We must also make sure that we invest in the skills that will drive change and meet new and growing needs such as Net Zero emissions and Building Safety. We will be announcing plans soon to tackle specific skills and occupations such as leadership and management, digital skills, and skills related to energy efficiency”, he said.