- Hong Kong-based CK group has been formally told its $13 billion bid to buy gas pipeline operator, APA Group, has been rejected.
- Treasurer Josh Frydenberg says the deal would be “contrary to the national interest”.
- And would mean a single foreign company group having sole ownership and control over Australia’s most significant gas transmission business.
Treasurer Josh Frydenberg today announced his final decision that a proposed $13 billion takeover by Hong Kong-based CK Infrastructure Holdings of the country’s biggest gas pipeline operator, APA Group, would be “contrary to the national interest”.
APA is the largest gas transmission system owner in Australia, owning 15,000km of pipelines representing 56% of Australia’s gas pipeline transmission system, including 74% of NSW and Victorian pipelines and 64% in the NT.
It also supplies gas for part of all mainland capital cities’ consumption, gas-fired electricity generation assets and liquefied natural gas exports.
Frydenberg says CK Group has been advised of his final decision that its current proposed acquisition of APA Group 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,” he says.
“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.”
He says the government continues to welcome any foreign investment that is not considered contrary to the national interest.
CK Infrastructure Holdings is part of the business founded by Hong Kong billionaire Li Ka-shing.
Unitholders of APA had already accepted the $11.00 cash bid, valuing the company at $12.97 billion.
The Hong Kong company last year bought Australian energy utility assets group Duet — which owns utility assets valued at $11.1 billion, including the Dampier to Bunbury gas pipeline in Western Australia, United Energy in Victoria and projects in the US and UK — for $7.37 billion.
CK Infrastructure, which owns power grids in South Australia and Victoria, is the same group which tried to buy NSW energy infrastructure body Ausgrid but was rejected by then-treasurer Scott Morrison on national security grounds.