Treasurer Josh Frydenberg announced this week that the $13 billion takeover bid for APA Group by the CK Asset Holdings consortium would be contrary to the 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.
“I thank CK Group for the way they have engaged constructively, both before and since my preliminary decision.”
The Treasurer said his 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,” he said.
“The government remains committed to welcoming foreign investment into Australia. Foreign investment helps support jobs and rising living standards. 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.
“We continue to welcome any foreign investment that is not considered contrary to our national interest. As Treasurer I consider each foreign investment proposal on its merits.”
The official rejection by the Australian government comes after the deal was reviewed by the ACCC and FIRB earlier this month.
In a 7 November statement, the Treasurer said the concentration of foreign ownership was not a question considered by the ACCC’s assessment. The FIRB was unable to reach a unanimous recommendation, expressing its concerns about aggregation and the national interest implications of such a dominant foreign player in the gas and electricity sectors over the longer term.
“The APA Group is a unique company, widely held among investors with significant Australian ownership and management,” Mr Frydenberg said.
“It is by far the largest gas transmission system owner in Australia.”
APA owns approximately 15,000 kilometres of pipelines representing 56 per cent of Australia’s gas pipeline transmission system, including 74 per cent of NSW 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.
