$13 billion China deal blocked

THE Hong Kong consortium behind the proposed purchase of Australia’s biggest gas pipeline company has defended its investment record after the Federal Government rejected its bid to acquire the APA Group on national interest grounds.

Foreign Minister Marise Payne is expected to face pressure from Chinese officials after the Government’s move to block the Hong Kong-based company from buying APA Group and its massive energy network.

Ms Payne will meet her Chinese counterpart in Beijing today, less than 24 hours after Treasurer Josh Frydenberg rejected the CK Group’s $13 billion bid to acquire APA Group on “national interest” grounds.

Mr Frydenberg said the deal would result in an undue concentration of foreign ownership by a single company group in the country’s most significant gas transmission business.

He will make a final decision on the APA proposal within two weeks.

He described the proposed purchase of APA as being “contrary to the 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 in a statement.

APA has 15,000km of pipelines representing 56 per cent of Australia’s gas pipeline transmission system.

CK Group has moved to defend its investment record.

The foreign consortium said the treasurer’s preliminary decision did not constitute “an adverse reflection” of its existing Australian operations.

The Treasurer stressed that Australia’s foreign investment policy was not discriminating against any investor and country, and that his decision was not an adverse reflection on CK Group.

The APA acquisition would have been the latest in a string of takeovers in recent years by CK Infrastructure in Australia, including Duet Group last year and gas distributor Envestra in 2014.

— with AFP/AAP

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