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Asia-Pacific Business Australian company’s takeover by Chinese firm looking to buy Aecon is ‘a positive story’: CEO

Aecon road crews work on Highway 407, near Highway 427 in Toronto, in this file photo.

Kevin Van Paassen/The Globe and Mail

An Australian engineering and construction company bought by the Chinese firm that seeks to acquire Canada's Aecon Group Inc. has been successful in winning more major bids despite early concerns about security, its chief executive officer says.

The company, Melbourne-based John Holland Group Pty Ltd., has won tenders over the past year to participate in $23-billion (Australian) worth of work on large public infrastructure projects, and expects to hire 100 people monthly over the next 15 months, CEO Joe Barr said.

John Holland, which currently employs 3,200 people, was purchased by China Communications Construction Co. Ltd. (CCCC) in 2015 for $1.15-billion. Last week, CCCC launched a $1.45-billion (Canadian) offer for Aecon in a deal that the target firm's CEO said will give it the heft to win more and larger construction and engineering projects.

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The bid has raised concern among some federal politicians about national security, owing to Aecon's work in the nuclear power and infrastructure industries.

Mr. Barr said the financial backing from CCCC, which is majority-owned by a state-run enterprise, has enabled John Holland to get involved in projects that previously would have been beyond its financial wherewithal.

"It's a fair statement that we wouldn't have been, certainly, in the position that we are in today, if it wasn't for the new ownership," Mr. Barr said in a phone interview on Sunday.

"The generic ownership position of a Chinese owner obviously came up [when the big bid was launched], and all of the things, as I understand it, that have been talked about or raised in Canada about security and so on. But that never really came up in a way that affected the business."

In similar fashion to its pledges with the offer for Aecon, CCCC has kept John Holland's management in place in Australia, where the company is involved in major rail-tunnel projects in both Melbourne and Sydney, said Mr. Barr, who signed on after CCCC finalized its acquisition. He was formerly CEO at Hansen Yuncken, another Melbourne-based construction company.

John Holland, which operates in Australia and also bids for work in southeast Asian locales, does not do nuclear refurbishment work like Aecon does, but it is involved in other projects that could elicit concern about security, such as major water projects, he said.

"We're not seeing the government behave any differently to John Holland under new ownership as a result of any concerns that they may have had. Overall it has been a positive story," Mr. Barr said.

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Prime Minister Justin Trudeau said CCCC's offer for Aecon would be vetted fully by Investment Canada, but he has not said whether it will also be subject to a comprehensive national-security review. A U.S. watchdog has warned that Chinese ownership could prevent Aecon from bidding on some infrastructure projects in the United States.

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