John Beck is president and CEO of Aecon Group Inc.; Lu Jianzhong is president of CCCC International Holding Ltd. (CCCI).
While the federal government continues its review of the acquisition of Aecon Group Inc. by CCCC International Holding Ltd. (CCCI), the deal has been the subject of considerable media and political attention – including misleading and outright false claims.
As the principals in this transaction, we want to set the record straight.
The business case for the combination of our companies is beyond doubt, which is why the acquisition was unanimously approved by Aecon’s board, by Aecon shareholders (by 99.4 per cent of the votes cast), by Canada’s Competition Bureau and by Chinese regulators.
The deal will be of considerable benefit to Canada. It will lead to more high-quality jobs for Canadians in communities across the country, as Aecon will be in a much stronger position to compete with the many large foreign companies already operating in the country, but without a large on-the-ground presence.
This confidence is based not only on our assessment of the market and Aecon’s established strengths, but also on recent experience of Australia’s John Holland – which was acquired by CCCI in 2015 and is on track to double the size of its business within five years. John Holland continues to be led by an all-Australian leadership team, is hiring new Australian employees every month and increased its revenue by almost $1-billion last year, a rise of nearly 40 per cent. Its increased capacity and access to additional capital has helped it win several new infrastructure projects in Australia, including new rail tunnels under Sydney Harbour and construction of the country’s largest correctional facility. It has also opened a regional office for Southeast Asia and is part of a consortium that won the contract to build a new rapid transit line in Singapore.
John Holland’s experience follows a similar pattern to that of Houston-based Friede & Goldman (F&G), a world leader and innovator in offshore architecture and engineering serving the oil and gas industry, which joined CCCI in 2010. Since then, CCCI helped F&G to better leverage its existing competitive strengths and increase its revenue five-fold. Growth at John Holland and F&G came not from undercutting the market, but instead from combining CCCI’s global knowledge and financial capacity with local expertise to be a stronger partner for domestic firms, suppliers and clients.
Those are facts. They indicate the types of benefits that can accrue to Canada once the Aecon-CCCI deal is completed.
For reasons that have more to do with political opinion and the desire to limit competition, some opponents of the deal have made completely false claims about the nature of Aecon’s business and what may happen if it joins CCCI. Despite what they say, Aecon will continue to hire its work force in Canada and the business will continue to focus on the construction and maintenance of infrastructure – not the day-to-day operation of it. In the telecommunications sector, Aecon installs and pulls cable; it doesn’t build or operate telecom systems.
In the area of nuclear technology, Aecon holds no intellectual property, and the Candu reactors on which it works are already widely used in China with support from Canadian companies and the Canadian government. Furthermore, work on nuclear facilities is subject to security clearances at the individual employee level, regardless of the nationality of the contractor involved. Perhaps the wildest assumption of all is that Aecon’s employees would be complicit agents of a foreign government, which is a deep insult to the thousands of Canadian men and women who work on Aecon construction sites across Canada and the unions that represent them.
Opponents have also played fast and loose with the truth about CCCI’s ownership and left out important facts. For instance, although a state-owned enterprise, China Communications Construction Co. Ltd (CCCC) is publicly traded on both the Hong Kong and Shanghai stock exchanges and operates for the benefit of all its shareholders, which include some of the world’s largest institutional investors, such as Canada Pension Plan Investment Board, Caisse de dépôt et placement du Québec, Blackrock and Vanguard. As one of the world’s largest construction companies, CCCC has more than 118,000 employees (including 48,000 foreign employees) in more than 140 countries and regions. The company does not need Chinese government subsidies for its international activities. In fact – as the success in Australia and the United States have shown – CCCI leverages its business sense with the knowledge and expertise of local experts to drive growth and provide all stakeholders with a strong return on investment.
Regardless of all the myths, if this deal is approved, Aecon will continue to be run as it always has – led in Canada by Canadians and in full compliance with Canadian laws and regulations and an unblemished ethical track record. The difference is the company will be in a stronger position to grow along with Canada’s infrastructure market, create more jobs and, with its unionized work force, build more of the infrastructure we need to keep Canada’s economy moving.