[color=rgb(51, 51, 51)]NEW YORK (MarketWatch) — Canada’s surprise decision to block a multibillion-dollar foreign bid for a local natural-gas company may spell bad news for other, similar deals in the energy sector.[/color]
[color=rgb(51, 51, 51)]The Canadian government said late Friday that it would not allow Malaysia’s Petroliam Nasional Bhd. to go ahead with its proposed 5.2 billion Canadian dollar (US$5.2 billion) acquisition of natural-gas producer Progress Energy Resources Corp., according to media reports[/color][color=rgb(51, 51, 51)]It didn't say why it nixed the deal, but Canadian law requires such deals be of “net benefit†to the country’s economy, said The Wall Street Journal.
As well as frustrating Petronas’ effort to buy Progress Energy, Canada’s decision could mean bad news for China National Offshore OIl Corp. (Cnooc[/color][color=rgb(0, 124, 29)]HK:883 +0.49%[/color][color=rgb(51, 51, 51)]]which in July offered to buy oil producer Nexen Inc.[/color][color=rgb(180, 0, 0)]CA:NXY [/color][color=rgb(181, 0, 0)]-0.98%[/color][color=rgb(180, 0, 0)]NXY [/color][color=rgb(181, 0, 0)]-6.40%[/color] for $15.1 billion.
Petronas has so far declined to comment on the decision, according to a report Saturday by Reuters. The news agency said the Progress deal was an important step for Petronas, which is seeking to expand beyond its borders. Buying into Canada would give it a more stable country to invest in after fighting between South Sudan and Sudan led Petronas to close most of its pipelines there.
