Canada’s slow-moving security review of the proposed takeover of contractor giant Aecon Group Inc., Toronto, by a Chinese government-owned firm is sparking speculation that the deal may end or be restructured. The Ministry of Innovation, Science and Economic Development blew past a late March deadline to finish its review of the planned $1.18-billion purchase by CCCC International Holding Ltd., triggering a 45-day extension. The deal was announced last October.

CCCI’s potential buy of Aecon’s telecom unit while Canada is undergoing a once-in-a-generation replacement of its fiber optic and wireless networks is a key government concern, writes Chris Murray, an analyst at AltaCorp Capital. Facing the ongoing government review, Aecon and CCCI extended the deal deadline to July 13.

Murray cites “low probability of the transaction being approved as is,” noting security concerns in telecom infrastructure, a key Aecon market. If the government does green-light the deal, it may require divestiture of Aecon’s 800-person telecom group, he adds.

Of the last 13 national security reviews by the Canadian government of pending mergers, all had some conditions imposed while three were blocked, one was withdrawn and five triggered divestitures.“We believe there remains an elevated level of risk with this transaction,” Murray points out.

Ministry spokesman Karl Sasseville confirmed the government’s review is “still ongoing,” but declined further comment.

Analyst Derek Spronck of RBC Dominion Securities termed the government decision to extend its review “not surprising” in a note to investors, but he anticipates a government decision by May 11.

Responding to deal critics, including the Canadian Construction Association, Aecon Group CEO John Beck has said the deal would boost his firm’s competitive position against non-Canadian conglomerates in overseas construction markets and domestically. He says the link also could allow Aecon access to China’s planned $3.2-trillion One Belt, One Road infrastructure initiative, says the Financial Post.