The Australian government has issued a warning, stating that it intends to prevent a Hong Kong and Chinese consortium's USD9bn bid to take over APA Group [APA:AU], an energy infrastructure company, due to conflicts with the country's national interest, as reported by fox19.com on November 7. The consortium is led by Hong Kong-based Cheung Kong Infrastructure Group (CKI) [1038:HK]. In order to take over APA Group, which owns more than 43,700 kilometers (27,100 miles) of natural gas pipeline in Australia, the consortium needed the approval of Australia's Foreign Investment Review Board. According to Treasurer Josh Frydenberg, if the deal was completed, about 70% of Australia's electricity and gas infrastructure would be owned by either CKI or State Grid, a Chinese state-owned firm.
This is not the first time that Australia has rejected a Chinese company's bid to invest in an Australian entity. In 2016, CKI and State Grid were blocked from leasing a 50.4% stake in Ausgrid, a Sydney-based electricity distribution company, for more than AUD10bn. Details were not disclosed, but it is speculated that the refusal is due to national security reasons. Earlier that year, Prime Minister Scott Morrison blocked another Chinese consortium Dakang Australia Holdings from purchasing an 80% stake in S. Kidman & Co., Australia's largest private landholding. Afterward, the Chinese Embassy stated that Australia displayed a "protectionist tendency", which would have a significant impact on the willingness of Chinese firms to continue to invest in the country.