Federal Treasurer Josh Frydenberg has announced he will block CK Asset Holdings Limited’s (CK Group’s) proposed $13 billion acquisition of APA Group, saying it “would be contrary to the national interest”.

Mr Frydenberg said that the acquisition would result in an undue concentration of foreign ownership by a single company group in Australia’s most significant gas transmission business. He intends to make a final decision under the formal process within two weeks.

Mr Frydenberg said he formed his preliminary view taking into account the significant analysis undertaken through a coordinated whole-of-government assessment and in close consultation with the Foreign Investment Review Board (FIRB) and the Critical Infrastructure Centre (the CIC), which are key sources of advice to support Government decision-making, including on investment transactions.

“The concentration of foreign ownership was not a question considered by the ACCC’s assessment of this proposed acquisition. The FIRB was unable to reach a unanimous recommendation, expressing its concerns about aggregation and the national interest implications of such a dominant foreign player in the gas and electricity sectors over the longer term,” said Mr Frydenberg.

The APA Group is the largest gas transmission system owner in Australia, owning 15,000km of pipelines representing 56 per cent of Australia’s gas pipeline transmission system, including 74 per cent of New South Wales and Victorian pipelines and 64 per cent in the Northern Territory.

It also supplies gas for part of all mainland capital cities’ consumption, gas-fired electricity generation assets and liquefied natural gas exports.

Mr Frydenberg said his preliminary view 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.

“My preliminary view reflects the size and significance of APA Group. It is about the extent to which the proposal is consistent with Australia’s national interest. The application of our foreign investment policy, expressed through my preliminary view, is not discriminatory against any investor or country.”

Related articles

Leave a reply

©2024 Infrastructure Magazine. All rights reserved


We're not around right now. But you can send us an email and we'll get back to you, asap.


Log in with your credentials

Forgot your details?