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Australia to block $9-bn Chinese energy takeover bid in 'national interest'

The CK Consortium needed approval of Australia's Foreign Investment Review Board to take over APA Group, which owns more than 43,700 kilometers of gas pipeline in Australia

AP | PTI  |  Canberra 

APA Group (Photo: www.apa.com.au)
APA Group (Photo: www.apa.com.au)

The on Wednesday warned it intends to block a Hong Kong and Chinese consortium's 13 billion Australian dollar ($9 billion) takeover bid for an because it conflicts with Australia's national interest.

The CK Consortium needed approval of Australia's to take over APA Group, which owns more than 43,700 kilometers of in

said he had told the consortium on Wednesday of his preliminary view that the takeover was not in Australia's interests. In practice, the decision to block the sale is final.

"I have formed this view on the grounds that it would result in an undue concentration of foreign ownership by a single group in our most significant business," Frydenberg said in a statement.

The was unable to reach a unanimous recommendation, expressing concerns about the national interest implications of such a in the gas and sectors over the longer term, Frydenberg said.

Peter Jennings, of the government-established think tank, had been advocating for weeks for the government to veto the sale on national security grounds.

"My sense is that if the FIRB and the are taking national security considerations seriously into account, they should say 'no' to this particular proposed takeover," Jennings said in September.

The consortium is led by Hong Kong-registered Cheung Kong Infrastructure Group, better known as CKI. CKI and Chinese state-owned were in 2016 blocked on classified national security grounds from leasing for 99 years a 50.4 per cent stake in Ausgrid, a grid, for more than AUD 10 billion.

That decision was made by when he was

While reasons were not detailed, there was speculation that the consortium was blocked because included an node that was connected to the secretive joint US-facility at Pine Gap in

Jennings said the finding that the sale of APA to Chinese interests was not in Australians' interest was a "no-brainer."

"If the takeover proceeded, we'd have about 70 per cent or more of electricity and would be owned by either CKI, a Hong Kong company, or State Grid, a Chinese state-owned entity," Jennings said.

"I just think that's a risk that no country would really find acceptable," he added.

First Published: Wed, November 07 2018. 22:45 IST
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