Federal Treasurer Josh Frydenberg has officially rejected the takeover bid for APA Group.
Mr Frydenberg, who signalled his intentions to block the Hong Kong-based CK Group’s $13 billion acquisition of the Australian pipeline owner earlier this month, has now officially closed the door on the takeover, saying 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,” he said.
“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.”
Prior to Senator Frydenberg’s decision concerns had arisen over CK Group’s ties to China, as well as the possibility of APA’s 15,000 km pipeline network falling under foreign ownership.
CK Group already holds an interest in several gas and electricity company’s in Australia, including the Australian Gas Infrastructure Group.
The treasurer’s decision will see approximately 56 per cent of the country’s pipeline transmission system remain in Australian hands.
Following the announcement, APA Chairman Michael Fraser said the company would continue operations as normal.
“The way ahead for APA is very clear – we will continue to work on ‘APA’s Plan A’, which is the successful growth strategy that we have employed for almost two decades,” he said.
APA Managing Director Mick McCormack reiterated Mr Fraser’s views, saying the future was bright for the company.
“Looking ahead, the $4 billion of future opportunities that we talked about in August 2018 remain firmly on our radar, and include in excess of $2 billion of Australian gas transportation prospects,” he said.
“We continue to see more growth, in the order of $300 to $400 million capital expenditure per annum from FY2020.”
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