National security was cited by the federal government as the reason the proposed $1.5-billion sale of AECON Group to China Communications Construction International Holding (CCCI), a state-sponsored company, will not be allowed to proceed.
“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," said Minister of Innovation, Science and Economic Development Navdeep Bains in a May 23 news release.
“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.”
AECON president-CEO John Beck expressed disappointment in a statement but said it's business as usual for the leading Canadian construction player.
"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 reported a backlog of $4.6 billion at the end of the first quarter, which included $910 million of new contract awards booked in the quarter, including a Montréal Light Rail Transit project and a contract for the Finch West Light Rail Transit project in Toronto.