Hockey blocks ADM's GrainCorp takeover
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Treasurer Joe Hockey will block the foreign takeover of Australia's largest agribusiness GrainCorp (GNC).
Mr Hockey told reporters in Sydney he would oppose a $3.4 billion offer from US giant Archer Daniels Midland to acquire 100% of the agribusiness.
He said he was conscious of the national interest when making the decision.
"For me to reject this proposal, I had to determine that the acquisition of GrainCorp by ADM is contrary to the national interest," he said.
"Based on all the available information, I have now made that decision."
Mr Hockey said his decision on the $3.4 billion offer was reached after "long and careful" deliberations.
"Since coming into government, I've made decisions on a number of foreign investment proposals and those decisions have facilitated a significant amount of new and welcome foreign investment in Australia," Mr Hockey said.
Of 131 significant foreign investment applications the government has dealt with, "this is the only application we have prohibited", he said.
Junior coalition partner the Nationals and some rural Liberals have opposed the GrainCorp sale.
Mr Hockey said the Foreign Investment Review Board (FIRB) was split on the takeover.
"The proposed acquisition of GrainCorp has been one of the most complex cases to come before the FIRB and it is one of the most significant proposed acquisitions of an agricultural business in Australia's history," he said.
Mr Hockey confirmed his decision was made after considering ADM's sweetened offer lobbed earlier this week.
He said he judged that allowing the bid to proceed would undermine public support for foreign interest in Australia, now and in the future, though added the government acknowledged the role of foreign investment in the Australian economy.
ADM allowed to increase stake
Mr Hockey confirmed that he would allow any further applications by ADM to increase its holding in GrainCorp up to 24.9%.
ADM currently owns 19.85% of GrainCorp.
"It was open to me, under the Act, to continue to cap ADM’s shareholding in GrainCorp at its current level," Mr Hockey said.
"I have decided not to do so."
"In fact, to encourage ADM to demonstrate its commitment to the Australian grains industry through its continued investment in GrainCorp, I am inclined, based on current circumstances, to approve any proposals from ADM to increase its shareholding in GrainCorp up to an interest of 24.9 per cent."
Mr Hockey said this would also provide a platform for ADM to build stakeholder support for potentially greater participation in the Australian industry as it develops.
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