Australia’s rejection of a proposed takeover of an Australian builder by a Chinese construction group shows the continued escalation of tensions between China and Australia.
The Australian government’s reason for rejecting the proposed acquisition was to protect national security. The Australian builder had been involved in a number of high-profile construction projects.
South African company WBHO, the majority shareholder of Australian-based construction contractor Probild, said in a filing to the Johannesburg Stock Exchange on Monday evening (Jan. 11) that “a major international construction and civil services company” had withdrawn its offer after learning that Australia’s foreign takeover regulator would reject its offer “on national security grounds.
The Australian Financial Review said Tuesday (Jan. 12) that China Construction Group planned to spend 300 million Australian dollars ($231 million) to buy WBHO’s 88 percent stake in Probid.
WBHO did not disclose the name of the interested buyer, and a spokesman for Probild declined to comment.
Australian Finance Minister Josh Frydenberg also did not comment on the acquisition. Frydenberg is responsible for overseeing Australia’s Foreign Investment Review Board (FIRB).
The Australian government’s action sparked discontent from the Chinese Communist Party. This is the latest example of the Australian government politicizing trade and investment issues, violating the principles of market economy and the spirit of the China-Australia Free Trade Agreement (FTA), and adopting discriminatory practices against Chinese companies, interfering with the good momentum of China-Australia pragmatic cooperation, said Zhao Lijian, a spokesman for the Chinese Communist Party’s Foreign Ministry, at a press conference on Tuesday.
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