Paladin Energy‘s (ASX: PDN) (OTCMKTS: PALAF) proposed CAD$1.14 billion acquisition of Fission Uranium (TSE: FCU) has run into a roadblock in the shape of a Chinese major shareholder, which is moving to block the deal from happening.
Representatives of Paladin Energy said on Monday that CGN Mining—a subsidiary of China General Nuclear Power—is opposing the merger.
The acquisition is valued at a 25.8 per cent premium to Fission’s stock price, and would have been an enhancement to the company’s position with the addition of Fission’s Patterson Lake South Project in Saskatchewan, Canada.
The opposition to the merger sparked discussions on the geopolitical implications of energy sector acquisitions. While CGN has not fully disclosed its reasons for blocking the acquisition, analysts speculate that control over uranium assets, regulatory concerns, or broader strategic interests in securing uranium supplies may be factors.
The market reacted swiftly to CGN’s opposition. Paladin Energy’s shares dropped as investors grew uncertain about the deal’s future. Fission Uranium’s stock, however, saw mixed reactions, with some investors interpreting the opposition as a sign of the asset’s value.
This situation highlights the geopolitical sensitivities surrounding nuclear resources. As uranium becomes more critical in global energy politics, CGN’s move reflects broader strategies where state-owned enterprises can use control over key resources like uranium to advance national interests.
The case now heads toward potential legal and regulatory scrutiny. The Supreme Court of British Columbia expected to issue a final ruling on the acquisition. The outcome could establish key precedents for foreign investments in strategic sectors like uranium mining.
Read more: Fission Uranium completes engineering at Patterson Lake South
Read more: Paladin Energy spends over C$1 billion to acquire Saskatchewan’s Fission Uranium
Majority of Fission shareholders voted in favour of the deal
In mid-July, Canada’s competition watchdog approved Paladin’s planned acquisition of Fission Uranium under the Investment Canada Act and Competitive Act. The proposed takeover went before the Supreme Court of British Columbia on 13 September for final approval. Paladin has stated that the hearing will now continue on 26 September.
On 9 September, 67.9 per cent of Fission’s shareholders voted in favour of the deal. However, the acquisition remains subject to closing conditions, including the court’s final order approving the arrangement.
Paladin CEO Ian Purdy emphasized that Fission’s Patterson Lake South Project in Saskatchewan is a natural fit for the company. He suggested it offered medium-term development potential to complement production from the recently restarted Langer Heinrich Mine in Namibia.
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joseph@mugglehead.com
