- A Chinese company has withdrawn its bid to purchase an Australian construction firm, after the Federal Government advised against it
- The China State Construction Engineering Corporation initially offered A$300 million to acquire Probuild, a Wilson Bayly Holmes-Ovcon (WBHO) subsidiary
- However, Australian Treasurer Josh Frydenburg and the FIRB reportedly advised that the transaction would be rejected on grounds of national security
- The Treasurer has intervened in other potential Chinese foreign investments, since relations between Australia and China worsened last year
- Treasurer Frydenburg declined to comment on the cancelled acquisition, or the Government’s role in the withdrawal
A Chinese company has withdrawn its bid to purchase an Australian construction firm, after the Federal Government advised against it.
The construction firm, Probuild, is a subsidiary of South African company Wilson Bayly Holmes-Ovcon (WBHO).
Probuild was responsible for constructing the Melbourne headquarters of CSL, the biotechnology firm which is manufacturing Australia’s locally produced COVID-19 vaccines. Currently, Probuild is building the new headquarters for Victoria’s Police.
The China State Construction Engineering Corporation initially offered a bid of A$300 million to acquire Probuild. While the transaction looked set to go ahead, the bidder was reportedly advised that Australian Treasurer Josh Frydenburg and the Foreign Investment Review Board (FIRB) would likely reject the transaction, on grounds of national security.
In response to this advice, the company officially withdrew its bid to acquire Probuild from WBHO. In a statement, WBHO revealed how the company and the China State Construction Engineering Corporation learned of the Government’s stance on the matter.
“WBHO has been advised by the potential acquirer of Probuild that it has withdrawn its proposed investment application in Probuild lodged with the Australian Foreign Investment Review Board following advice that its application would be rejected by the Federal Government on the grounds of national security,” the statement read.
“WBHO notes that after significant time, investment, and ongoing commitment from both WBHO and the potential acquirer in progressing the Proposed Transaction, due diligence was completed and commercial terms of the Proposed Transaction were otherwise materially agreed between the parties,” it added.
The company went on to express its continuing optimism about Probuild’s prospects in the Australian market, in spite of this considerable hurdle.
When approached by the ABC, Treasurer Frydenburg declined to comment on the cancelled acquisition, or on the Government’s role in the withdrawal. However, this intervention is just the latest in a number of potential Chinese foreign investments which Frydenburg has thwarted of late.
Last year, the Treasurer rejected the A$600 million acquisition of Lion Dairy and Drinks by China’s Mengnui Dairy, calling it contrary to national interests. It is likely that this was just another indication of the worsening economic relations between Australia and China, which started to sour last year.