Aus­tralia knocks back CKI pipe­line bid, cit­ing na­tional se­cu­rity

The Star Malaysia - StarBiz - - Foreign News -

CAN­BERRA: CK Group’s A$13bil (US$9.4bil) bid for gas pipe­line op­er­a­tor APA Group was knocked back by Aus­tralia’s gov­ern­ment on na­tional se­cu­rity con­cerns, a de­ci­sion that has the po­ten­tial to fur­ther in­flame diplo­matic ten­sions with China.

“I have ad­vised the con­sor­tium led by CK As­set Hold­ings Ltd of my pre­lim­i­nary view that its pro­posed ac­qui­si­tion of APA Group would be con­trary to the na­tional in­ter­est,” Trea­surer Josh Fry­den­berg said in a state­ment.

His view was based on con­cerns it would lead to an un­due con­cen­tra­tion of for­eign own­er­ship by a sin­gle com­pany group in one of the coun­tries most sig­nif­i­cant gas trans­mis­sion busi­nesses. Fry­den­berg said he would make a fi­nal de­ci­sion within two weeks.

The de­ci­sion scup­pers the Hong Kong­based con­glom­er­ate’s big­gest overseas deal, which would have given it con­trol of pipe­lines that de­liver about half of Aus­tralia’s gas.

Ris­ing elec­tric­ity prices and black­outs have made en­ergy se­cu­rity a hot po­lit­i­cal is­sue in the na­tion, and an overseas ac­qui­si­tion of crit­i­cal in­fra­struc­ture would have been sen­si­tive for Prime Min­is­ter Scott Mor­ri­son’s gov­ern­ment.

Mor­ri­son, who served as trea­surer be­fore be­com­ing prime min­is­ter in Au­gust, has blocked sev­eral deals in­volv­ing China-linked com­pa­nies in the past three years, draw­ing ire from the gov­ern­ment in Bei­jing.

Ties be­tween the two na­tions have been strained since De­cem­ber af­ter the gov­ern­ment im­plied China was med­dling in Aus­tralian pol­i­tics and me­dia.

As the most China-de­pen­dent de­vel­oped econ­omy, Aus­tralia po­ten­tially has a lot to lose should re­la­tions with its big­gest trad­ing part­ner de­te­ri­o­rate fur­ther. Wine com­pa­nies com­plained ear­lier this year that the frayed ties were be­hind ship­ments be­ing de­layed at Chi­nese ports.

CK Group’s cash of­fer was split among sub­sidiaries CK As­set Hold­ings Ltd, CK In­fra­struc­ture Hold­ings Ltd and Power As­sets Hold­ings Ltd. It was cleared in Septem­ber by the com­pe­ti­tion reg­u­la­tor, af­ter the con­glom­er­ate agreed to sell nat­u­ral gas pipe­line and stor­age in­fra­struc­ture as­sets in West­ern Aus­tralia to ap­pease anti-trust con­cerns.

CK, whose Aus­tralian port­fo­lio in­cludes power dis­trib­u­tor Duet Group, has been blocked in the na­tion be­fore. The gov­ern­ment re­jected a bid by CK In­fra­struc­ture in 2016 for the elec­tric­ity net­work Aus­grid. — Bloomberg

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