August 20, 2020
Australia will not approve China's Mengniu Dairy buyout of Australia's milk brands
The Australian government will allegedly reject China-based Mengniu Dairy's proposed buyout of Japan's Kirin Holding's ownership of Australian milk brands such as Lion Dairy & Drinks, Reuters reported.
Citing a report from the Australian Financial Review, Josh Frydenberg, Australia's Treasurer contradicted the Foreign Investment Review Board's (FIRB) advice to approve the AUD 600 million (~US$431 million; AUD 1 = US$0.72) buyout agreement. No sources were identified.
Mengniu Dairy sought to purchase Lion Dairy & Drinks from Kirin Holdings in November 2019.
In June, Australia amended its foreign investment laws to give the treasurer powers to vary or impose conditions on agreement. The treasurer can also force a divestment even after FIRB approval and gives the government the power to force a business to sell if it is judged to be a national security risk.
Frydenberg rejected commenting on the Australian Financial review report.
In an e-mailed response, he said the Australian government does not provide comments with regards to foreign investment screening arrangements.
The news comes as Australia and China have increased political tensions after Canberra announced an independent inquiry into the origins of COVID-19 and criticised the new Hong Kong security law.
China suspended select beef imports from Australia, imposed import tariffs on Australian barley and advised Chinese students and tourists not to go to Australia because of racial prejudice. China announced an Australian wine import anti-dumping probe on August 18.