[SYDNEY] Australia has officially vetoed CK Group's A$13 billion (S$13 billion) bid for APA Group, saying concentrated foreign ownership of the country's dominant natural gas pipeline operator isn't in the national interest.
"The consortium led by CK Asset Holdings Ltd has been advised of my final decision that its current proposed acquisition of APA Group would be contrary to the national interest," Treasurer Josh Frydenberg said in a statement Tuesday. "I have formed this view on the basis that it would result in a single foreign company group having sole ownership and control over Australia's most significant gas transmission business."
Mr Frydenberg said that the government had no specific issue with CK Group and welcomed the Hong Kong-based company's investments in Australia and "its broader contribution to the Australian economy," reiterating sentiments he gave in his preliminary assessment earlier this month. CK Asset Holdings acknowledged receiving the treasurer's statement, without providing further comment.
Still, the move is a potential impediment to deeper business ties with China, the country's biggest trading partner. Prime Minister Scott Morrison, who served as treasurer before replacing Malcolm Turnbull in August, has blocked several deals involving China-linked companies in the past three years, drawing ire from the government in Beijing.
The rockier relationship was underscored this week after China began an anti-dumping probe into imports of Australian barley, a move that followed Australia's decision to jointly redevelop a naval base in Papua New Guinea with the US, Beijing's chief antagonist on trade issues.
Blocking CK's deal could now open the way for local bidders for APA Group. In 2016, an Australian group including IFM Investors Pty Ltd and AustralianSuper Pty Ltd stepped in to buy a 50 percent stake in electricity distributor Ausgrid, after the government knocked back bids from CK and State Grid Corp of China on national interest grounds. Any new suitor would likely need the backing of pension fund UniSuper Ltd, which holds a 16 per cent stake in APA.