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Nexen's deal still needs approval from the Canadian government.

CNOOC's US$15b takeover bid wins approval from Nexen investors


Nexen's shareholders approved CNOOC's US$15.1 billion bid for the Canadian oil and natural gas producer, the biggest foreign takeover by a Chinese company.

About 99 per cent of common shareholders who voted cast ballots in favour of the takeover, Barry Jackson, non-executive chairman of Nexen, said at a special meeting in Calgary yesterday. The transaction required approval from two-thirds of shareholders.

CNOOC, China's largest offshore oil and gas producer, agreed to pay US$27.50 a share for Calgary-based Nexen in an offer announced on July 23. The deal still needs approval from the Canadian government.

There was "low risk" the Canadian government would block the deal or impose onerous conditions, said Philip Skolnick, a research analyst at Canaccord Genuity in New York. Canada was looking to sell crude to China after the United States rejected the Keystone XL pipeline, which would have delivered more oil from Alberta to Gulf Coast refineries, he said.

The government said on August 29 that it had received CNOOC's application to buy Nexen. Canada has 45 days to examine the application and may extend that deadline by 30 days.

In 2010, the federal government rejected BHP Billiton's hostile US$40 billion bid for Potash Corp of Saskatchewan, the second takeover since 1985 to be blocked under Canadian law.

Prime Minister Stephen Harper pledged he would spell out a "policy framework" for foreign takeovers when he issues a decision on the CNOOC bid.

Nexen produces crude from its Long Lake oil-sands project in Alberta, as well as projects in the North Sea, offshore West Africa and the Gulf of Mexico. US authorities can block the sale of Nexen's Gulf assets.

This article appeared in the South China Morning Post print edition as: Nexen investors give nod to CNOOC takeover