SYDNEY (REUTERS) – Australia will not approve China Mengniu Dairy’s proposed buyout of some of Australia’s best-known milk brands from Japan’s Kirin Holdings, the Australian Financial Review reported on Thursday (Aug 20).
Australia Treasurer Josh Frydenberg has gone against the advice of the Foreign Investment Review Board which was to approve the A$600 million (S$590 million) deal, the report said, citing unidentified sources.
China Mengniu Dairy offered to buy Lion Dairy & Drinks from Japan’s Kirin Holdings in November last year.
Australia in June announced the biggest shakeup of its foreign investment laws in almost half a century, giving the Treasurer last-resort powers to vary or impose conditions on a deal or force a divestment after it has been approved by the Foreign Investment Review Board.
The law also empowers the government to force the sale of a business if it deems it a national security risk.
Mr Frydenberg declined to comment on the report.
“The government does not comment on the details of foreign investment screening arrangements as they apply, or could apply, to particular cases,” he said in an e-mailed response.
Diplomatic relations between China and Australia have soured after Canberra called earlier this year for an independent inquiry into the origins of the new coronavirus and criticised a new security law in Hong Kong.
China has recently imposed import tariffs on Australian barley, suspended some beef imports and advised Chinese students and tourists to avoid travelling to Australia, citing racial discrimination.
On Tuesday, China launched an anti-dumping probe into imports of Australian wine.