GrainCorp takeover rejected
Treasurer Joe Hockey rejects the $ 3.4 billion takeover bid by Archer Daniels Midland as he believed it was contrary to the national interest.
PT4M13S http://www.smh.com.au/action/externalEmbeddedPlayer?id=d-2yf8l 620 349 November 29, 2013
The political upside to Treasurer Joe Hockey’s decision to block the US bid for GrainCorp was supposed to have been a harmonious Coalition.
But National Party joy at the torpedoed takeover by Archer Daniels Midland could not mask white-hot anger among sections of the Liberal Party at Mr Hockey’s decision on Friday.
The decision was interpreted by some as the removal of the ”open for business” sign Prime Minister Tony Abbott claimed had been staked in the ground on election night.
Liberal economic dries, who were ”incensed” by Mr Hockey’s decision on Friday, are fearful that the mooted partial-re-nationalisation of Qantas is now a genuine prospect.
Defending claims Mr Hockey had been bullied into his decision by Agriculture Minister Barnaby Joyce and Nationals Leader Warren Truss, Mr Abbott insisted that the Treasurer had acted as the ”guardian of our national interest”.
”We are open for foreign investment but it has to be foreign investment that accords with our overall national interest,” Mr Abbott said.
Mr Hockey said grain growers in eastern Australia had expressed concern an acquisition by ADM could reduce competition and impede their ability to access grain storage and distribution.
”Given that the transition towards more robust competition continues and a more competitive network is still emerging, I consider that now is not the right time for a 100 per cent foreign acquisition of this key Australian business,” he said.
Victorian Liberal Russell Broadbent said he was ”delighted”, saying opposition among the community and ‘‘important people’’ in his regional seat had been clear.
Tim Wilson, of the Liberal-aligned Institute of Public Affairs, said Mr Hockey’s decision set a worrying tone. He compared it with the decision by the Rudd government in 2009 to reject the Productivity Commission’s recommendations to remove parallel import restrictions on foreign published books.
‘‘The past two years have been blighted by the issue of sovereign risk to investing in Australia but this is not the sort of ‘steady hand’ decision that everyone expected to reassure investors,’’ Mr Wilson said.
Mr Joyce said there would be ‘‘no gloating’’ from Nationals.
‘‘I believe it’s firmly in our national interest to make sure that one of Australia’s greatest agricultural assets, GrainCorp, remains predominantly Australian-owned,’’ he said.
‘‘In the next 50 years, the world will consume more food than it has in the history of humankind on the planet. We want to make sure Australia’s got the best potential to be a larger player and benefactor of that.’’
Nationals MP Andrew Broad said it was ‘‘nonsense’’ that Mr Hockey had rebuffed ADM in the interest of keeping the Nationals onside within the Coalition.
The opposition said Mr Hockey was the victim of bullying by the Nationals.
Shadow Treasurer Chris Bowen said: ‘‘Foreign investment decisions are controversial and difficult but a good treasurer makes the tough decisions.
‘‘Today Joe Hockey said Australia is not open for business.’’