TORONTO, Feb. 9, 2018 /CNW/ - Aecon Group Inc. (TSX:
ARE) issued the following statement about the Company and its
proposed transaction with CCCC International Holding Limited
(CCCI).
"There are a number of important issues to consider with this
transaction," said John Beck, CEO.
"We fully support the Government of Canada processes, as established under the
Investment Canada Act and the Competition Act. Over the last
several months, Aecon and CCCI have been answering a number of
valid and important questions about all aspects of our business and
the Canadian market. The Competition Bureau has cleared the
transaction and we continue to respond to officials from the
Investment Review Division. But in order for this process to work
properly, it is important that elected officials and the public
have accurate information. Unfortunately, we have seen a series of
false and misleading claims made by third parties and reported in
the media. We feel compelled to set the record straight."
- Following the close of the proposed transaction with CCCI,
Aecon will continue to be led by its Canadian management team and
will operate according to the company's long-held values in full
compliance with all applicable laws and regulations in Canada.
- CCCI is not the first international company that would be
operating in Canada. The Canadian
construction industry is a competitive international market that
includes some of the largest firms in the world, particularly as
projects have increased significantly in size, scope and complexity
in recent years. Many of these firms have not established a
long-term commitment to Canada,
through the creation of Canadian headquarters or management teams.
This is in contrast to CCCI's approach to participating in the
market through the acquisition of a Canadian-led company.
- Aecon does not own any intellectual property related to nuclear
energy; nor does it possess other sensitive proprietary technology.
Aecon offers construction and refurbishment support to clients in
the nuclear industry.
- Michael Beattie claims to be a
major construction company executive and his statements opposing
the transaction have been widely reported. We have been unable to
find any evidence that Mr. Beattie is a "veteran construction
industry executive." We know, for example, that his company is not
a registered business. Neither he nor his company is a member of
any Canadian construction association. He has also taken credit for
a number of construction projects for which we can find no evidence
of his participation.
- Some have alleged that CCCI has access to government subsidies
from Beijing. Any subsidies its
parent company, CCCC, has received are related to specific
government R&D projects in China that would have been available to any
company involved in those projects. CCCI does not receive
government subsidies for its international activities. CCCC is a
commercially focused, publicly traded company listed on both the
Hong Kong and Shanghai stock exchanges and its shareholders
include some of the world's largest institutional investors.
- Members of the Conservative Party have raised a number of
questions about the transaction in the House of Commons, some of
which were based on statements made by Mr. Beattie. We have offered
a briefing on the transaction to the Conservatives to provide them
with the facts.
- It has been alleged that a Communist Party function will be
established in Canada within
Aecon. This is incorrect. The Party Committee function is a
standard practice in China and
will be based in Beijing. The
purpose of this function is to advise the Board of CCCC on Chinese
national strategic opportunities. Corporate decisions by CCCC and
CCCI will continue to be made by their Board of Directors.
- In a recent opinion piece, University of
Ottawa Professor Wesley Wark
asserts "CCCC has, to date, done relatively little business in the
economies of Canada's key security
partners in the Five Eyes network (the
United States, Britain,
Australia and New Zealand). The proposed takeover by China
Construction of Aecon positions Canada, uncomfortably, as a sort of beachhead
for future investments in the West." That is not correct. CCCI owns
a construction business in Australia (John Holland Group) which is
similar in size to Aecon, and an engineering business in the US
(Friede & Goldman). Both businesses have been very successful
since being acquired by CCCI and have continued to operate within
industry practices in compliance with all local and national laws,
while continuing to be led by local management teams using domestic
labour.
- Professor Wark also incorrectly stated that Aecon is "embedded"
in critical military infrastructure. Aecon is not building or
involved in sensitive military installations.
- It has also been reported that the transaction "is opposed by
most players in the Canadian construction industry." Given that
there are thousands of construction businesses in Canada, we suspect this claim is based not on
fact but rather on the actions of the executive committee of the
Canadian Construction Association. The executive committee, acting
without consultation with or approval of its own Board of Directors
or wider membership, has based its opposition on a 15-year old
policy that opposed the establishment of Canadian Crown
Corporations to bid against private companies. In no way does the
Aecon transaction result in a Canadian (or any) Crown Corporation
bidding against a private company.
- Moreover, our largest unions support the transaction. The
Labourers' International Union of North
America, the International Union of Operating Engineers and
Canada's Building Trades Unions
have all publicly expressed support for the acquisition as they
appreciate it will make for a stronger Aecon.
- Large commercial and public-sector customers have also
expressed confidence in Aecon and its future, as evidenced by its
selection for major new projects from government agencies and
clients, including BC Hydro, Bruce Power and CDPQ Infra, since our
deal was first announced.
- Our shareholders overwhelmingly supported the transaction, with
more than 99 per cent of votes cast approving the sale.
Mr. Beck concluded, "Aecon welcomes the review on the merits of
the proposed transaction and will continue to seek to obtain all
the necessary regulatory approvals to close the transaction and get
on with the work of building a stronger Aecon and a better
Canada."
About Aecon
Aecon Group Inc. (TSX: ARE) is a Canadian
leader and partner-of-choice in construction and infrastructure
development. Aecon provides integrated turnkey services to private
and public-sector clients in the Infrastructure, Energy and Mining
sectors and provides project management, financing and development
services through its Concessions segment. For more information,
please visit www.aecon.com and follow us on Twitter at
@AeconGroup.
Statement on Forward-Looking Information
The
information in this press release includes certain forward-looking
statements. These forward-looking statements are based on currently
available competitive, financial and economic data and operating
plans but are subject to risks and uncertainties. More particularly
and without limitation, this press release contains forward-looking
statements and information concerning the anticipated benefits of
the transaction.
Forward-looking statements may include, without limitation,
statements regarding the operations, business, financial condition,
expected financial results, performance, prospects, ongoing
objectives, strategies and outlook for Aecon. Forward-looking
statements may in some cases be identified by words such as "will,"
"plans," "believes," "expects," "anticipates," "estimates,"
"projects," "intends," "should" or the negative of these terms, or
similar expressions. Except as required by applicable securities
laws, forward-looking statements speak only as of the date on which
they are made and Aecon undertakes no obligation to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
In respect of the forward-looking statements and information
concerning the anticipated benefits and completion of the proposed
transaction, Aecon and CCCI have provided such in reliance on
certain assumptions that they believe are reasonable at this time,
including assumptions as to the ability of the parties to receive
Investment Canada Act approval and satisfy the other
conditions to the closing of the transaction; and other
expectations and assumptions concerning the transaction and the
operations and capital expenditure plans of Aecon following
completion of the transaction. Accordingly, readers should not
place undue reliance on the forward-looking statements and
information contained in this press release.
Since forward-looking statements and information address future
events and conditions, by their very nature they involve inherent
risks and uncertainties. Actual results could differ materially
from those currently anticipated due to a number of factors and
risks. Risks and uncertainties inherent in the nature of the
transaction include the failure of Aecon and CCCI to obtain
Investment Canada Act approval, including those noted above,
or to otherwise satisfy the conditions to the completion of the
transaction, in a timely manner, or at all. Failure to so
obtain such approvals, or the failure of the parties to otherwise
satisfy the conditions to or compete the transaction, may result in
the transaction not being completed on the proposed terms, or at
all. In addition, if the transaction is not completed, and
Aecon continues as an independent entity, there are risks that the
announcement of the transaction and the dedication of substantial
resources of Aecon to the completion of the transaction could have
an impact on Aecon's current business relationships (including with
future and prospective employees, customers, distributors,
suppliers and partners) and could have a material adverse effect on
the current and future operations, financial condition and
prospects of Aecon. Furthermore, the failure of Aecon to comply
with the terms of the definitive agreement may result in Aecon
being required to pay a fee to CCCI, the result of which could have
a material adverse effect on Aecon's financial position and results
of operations and its ability to fund growth prospects and current
operations.
SOURCE Aecon Group Inc.