GrainCorp wildcard
The free-trade agreement issue is believed to have surfaced last week, and it appears to increase the pressure on the government to wave the takeover through.
It commits the government to advise the US government if there are concerns about a US takeover bid for an Australian company, to give the US the option of opening up direct government-to-government talks, and to allow "sufficient time" for it to do so.
The deadline for a decision on Archer Daniels Midland's bid for GrainCorp was extended to December 17 in October by the Treasurer, Joe Hockey, and is now three weeks away.
Hockey hinted on Thursday, however, that the decision is close, saying it was "not too far off".
He cited the size and complexity of the takeover when he gave himself more time, but by October it was already clear that the Coalition was divided about the takeover proposal.
Frequently Asked Questions about this Article…
The free-trade agreement with the United States includes a side deal that requires the Australian government to inform the US if there are concerns about a US takeover bid for an Australian company. This agreement adds pressure on the government to approve Archer Daniels Midland's $3.4 billion takeover offer for GrainCorp.
The decision deadline for Archer Daniels Midland's bid for GrainCorp was extended to December 17 by Treasurer Joe Hockey due to the size and complexity of the takeover. This extension allows more time to address the divisions within the government regarding the proposal.
The free-trade agreement affects US-Australia business relations by allowing the US government to engage in direct talks with Australia if there are concerns about a US company's takeover bid. This provision ensures that both governments have sufficient time to discuss and resolve any issues.
Joe Hockey, the Treasurer, plays a crucial role in the GrainCorp takeover decision. He extended the deadline for the decision and hinted that a resolution is close, indicating his involvement in navigating the complexities and divisions within the government regarding the takeover.
There is division within the Australian government about the GrainCorp takeover due to differing opinions on the impact of Archer Daniels Midland's $3.4 billion offer. Some members may have concerns about foreign ownership of a major grain handler in eastern Australia.
Archer Daniels Midland has made a $3.4 billion takeover offer for GrainCorp, which is the largest grain handler in eastern Australia. This offer is currently under consideration by the Australian government.
The free-trade agreement influences the timing of the GrainCorp decision by requiring the Australian government to notify the US of any concerns, allowing time for government-to-government talks. This process can affect the timeline for reaching a decision on the takeover bid.
The potential outcomes of the GrainCorp takeover decision include approval of Archer Daniels Midland's bid, which would result in foreign ownership of GrainCorp, or rejection of the bid, which would maintain the current ownership structure. The decision will impact the future of grain handling in eastern Australia.
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