APA takeover deal stopped by Government
21 Nov 2018
Gas and LNP has taken centre stage in the energy news as Treasurer Josh Frydenberg blocks the sale of Australian gas pipeline company APA.
The government rejected Hong Kong utility CKI’s bid to takeover APA this week, handing down it’s final rejection of the $13 billion offer after allowing a revised offer to be put forward by CKI earlier this month. The revised offer did not include a potential partnership with an Australian company, one of the suggestions put forward by the Foreign Investment Review Board and was rejected on the basis that the takeover would concentrate ownership of a critical energy network under a single foreign company.
Frydenberg stated it 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.”
CKI currently holds a 51 per cent share in South Australia’s only electricity distributor, SA Networks, and as well as in Victoria’s largest distributors CitiPower and Powercor. ASX-listed company Spark Infrastructure holds the remaining shares.
The CK Group consortium released a statement on Wednesday morning saying the takeover will not proceed and deal was terminated.
APA chairman Michael Fraser said in a statement on Wednesday morning “With the CKI Consortium proposal not proceeding, the way ahead for APA is very clear – we will continue to work on ‘APA’s Plan A’, which is the successful growth strategy that we have employed for almost two decades.”