Australia blocks Chinese group's bid to acquire energy infra major
09 November 2018
Australia has blocked a $9 billion bid by the CK Group of Hong Kong to acquire an energy infrastructure company, claiming that the move would be against its national interest.
The growing presence of Chinese companies in Australia is worrying government leaders, who fear that these foreign companies would have undue influence on the economy.
Josh Frydenberg, the Australian Treasurer, said the proposed bid by the CK consortium to acquire the 15,000-km-long pipeline (representing more than half of Australia’s gas pipeline transmission system) would be contrary to national interest.
“I have formed this view on the grounds that it would result in an undue concentration of foreign ownership by a single company group in our most significant gas transmission business,” he said.
According to him, Australia’s foreign investment policy was not discriminating against any investor or country and the decision to block the CK Group bid was not an adverse reflection on it.
There has been growing opposition in Australia to the increasing presence of Chinese corporates in the country.
Peter Jennings, executive director of the government-established Australian Strategic Policy Institute think tank, had been opposed to the deal and was keen that the government veto it.
“If the takeover proceeded, we’d have about 70 per cent or more of electricity and gas infrastructure owned by either CKI, a Hong Kong company, or State Grid, a Chinese state-owned entity,” he said. “I just think that's a risk that no country would really find acceptable.”