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Chris Hersh Discusses the Uncertainty of Deals Involving Chinese SOEs with Canadian Lawyer


Chris Hersh has been interviewed for an article titled “Death of Aecon Sale Signals Uncertainty of Deals Involving Chinese SOEs,” published by Canadian Lawyer.

Writes Jennifer Brown: “The federal government’s decision this week to block the acquisition of Aecon Group Ltd. by a Chinese state-owned enterprise signals the difficulty of determining upfront if future investment from Chinese SOEs will be approved. Following a full national security review launched in February by the federal government, on Wednesday Economic Development Minister Navdeep Bains announced the feds were blocking the proposed $1.5 billion acquisition of Aecon by China Communications Construction Company International Holding Ltd., citing national security concerns.”

Says Chris: “It is becoming increasingly difficult to predict and you clearly can’t take anything for granted anymore when you’re dealing with an acquisition involving a Chinese SOE.”

He also says that it could mean Canada will see less Chinese investment by SOEs in the future: “Why invest the money and time if you have to go through a process that is uncertain?”

Chris goes on to discuss several recent deals involving Chinese SOEs including O-Net Technologies/ITF Technologies, Hytera Communications Corp./Norstat International Inc., and CNOOC/Nexen.

For those working with SOEs, Hersh says companies now need to look at projects with a broader lens: “You need to do broad national security screen and think about who might line up against the deal and how to manage that issue. People may want to consult with a security expert who has that credibility beforehand to see if they are prepared to go public with their views.”

Read the full article here.