The Globe and Mail reports that talks have been underway for several weeks between the Chinese government and Li Ka-shing, the Hong Kong billionaire with dual Canadian citizenship who heads up Husky.
According to sources close to the company, China is in talks to buy full control of Husky through one of its state-owned energy companies, such as PetroChina Co. Ltd.
PetroChina did commence discussions with the Li family two years ago about a purchase of Husky, but the two sides could not come to an agreement about price.
Based on recent gains in Husky's share price driven by takeover rumours, the company has a market cap of $14 billion.
The Li family controls about 71 per cent of Husky's shares through personal holdings and their Hong Kong holding company, Hutchison Whampoa Ltd.
At this point, both the Li family and the holding company have declined to comment on the matter.
Chinese officials are already in talks to buy Canada's largest base metals miner, Noranda Inc., through state-owned mining company China Minmetals Corp.
China's search for resources and its desire to build close ties with western nations such as Canada has led the nation's state firms to prospect for possible acquisition opportunities in Sudan and Peru, Ecuador, Chile, Australia and Venezuela.
