Federal treasurer Josh Frydenberg has officially rejected the takeover bid for APA Group by Hong Kong-based CK Group.
CK Group bid $13 billion for the acquisition of Australia’s national gas pipelines in June, but was rejected officially today by Mr Frydenberg who stated it would “be contrary to national interest”.
“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.
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“My decision is not an adverse reflection on CK Group or the individual companies.
“CK Group companies are already a substantial investor in Australia’s gas and electricity sectors and a significant provider of infrastructure services that millions of Australians rely upon.
“The Australian Government welcomes CK Group’s investments in Australia and its broader contribution to the Australian economy.”
Mr Frydenberg said APA Group is a unique company, widely held amongst investors with significant ownership and management.
It is by far the largest gas transmission system owner in Australia, owning 15,000km of pipelines representing 56 per cent of Australia’s gas pipeline transmission system, including 74 per cent of New South Wales and Victorian pipelines and 64 per cent in the Northern Territory.
It also supplies gas for part of all mainland capital cities’ consumption, gas-fired electricity generation assets and liquefied natural gas exports.
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Mr Frydenberg said foreign investment was welcome as long as it was not contrary to national interest.
“Foreign investment helps support jobs and rising living standards,” Mr Frydenberg said.
“The foreign investment framework facilitates such investment while giving assurance to the Australian community that the investment is being made in a way that does not compromise Australia’s national interest.”
APA Group was contacted for comment.