Canberra — Australia on Friday blocked the Aus$3 billion (US$2.7 billion) takeover bid by U.S. food giant Archer Daniels Midland Co. for GrainCorp Ltd.
“This proposal has attracted a high level of concern from stakeholders and the broader community,” Treasurer Joe Hockey said today in a statement after advice from the Foreign Investment Review Board. “Now is not the right time for a 100 percent foreign acquisition of this key Australian business.”
The implementation was the most contentious foreign takeover bid since previous governments blocked the sale of the Australian Securities Exchange to the Singapore Exchange in 2011, and Royal Dutch Shell PLC was blocked from buying Australian oil and gas rival Wood-side Petroleum Ltd. in 2001, according to reports.
“Many industry participants, particularly growers in eastern Australia, have expressed concern that the proposed acquisition could reduce competition and impede growers’ ability to access the grain storage, logistics and distribution network,” Hockey said in a statement.
“I therefore judged that allowing it to proceed could risk undermining public support for the foreign investment regime and ongoing foreign investment more generally,” he said. “This would not be in our national interest.”
ADM first lodged its takeover application in May with Australia’s Foreign Investment Review Board, which reports to the treasurer on whether proposed foreign takeovers pass the Australian national interest test.