Investing

U.S. Greenlights Cnooc Acquisition of Nexen

Offshore drill rig
Thinkstock
The Committee on Foreign Investment in the U.S. (CFIUS) has given its approval to the $15.1 billion acquisition of Nexen Inc. (NYSE: NXY) by China’s Cnooc Ltd. (NYSE: CEO). The Canadian government approved the deal last December, and today’s announcement clears the way for the a final closing on the sale.

The U.S. approval was needed because about 10% of Nexen’s assets are located in the U.S., primarily in the Gulf of Mexico. The U.S. decision to allow the deal to go ahead is likely due to a lack of national security issues, although neither the U.S. government nor Nexen has made a statement.

When Cnooc made an $18.5 billion offer to acquire Unocal in 2005, the Chinese firm withdrew its offer before it even went to CFIUS for consideration. Chevron Corp. (NYSE: CVX) ultimately acquired Unocal.

Canada’s prime minister, when he announced his government’s approval of the deal, made it pretty clear that the country does not want its natural resources to be acquired by companies controlled by foreign governments: “To be blunt, Canadians have not spent years reducing the ownership of sectors of the economy by our own governments, only to see them bought and controlled by foreign governments instead.” He sent so far as to say the further foreign state control of Canada’s resources would not be a benefit to the country.

Chinese firms have taken stakes in a number of U.S. energy companies, primarily those that are drilling for oil and natural gas in the various shale plays. Chesapeake Energy Corp. (NYSE: CHK) and Devon Energy Inc. (NYSE: DVN) have both given up significant shares in oil and gas leases in exchange for cash.

The #1 Thing to Do Before You Claim Social Security (Sponsor)

Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.

A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.

Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.

 

Have questions about retirement or personal finance? Email us at [email protected]!

By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.

By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.