DJ ADM's A2.7B Graincorp Deal a Risk Says Australia's Hockey
Oct 30, 2012 (Dow Jones Commodities News via Comtex) --By Enda Curran
SYDNEY--Archer Daniels Midland Co.'s (ADM) 2.7 billion Australian dollar (US2.79 billion) bid for GrainCorp Ltd. (GNC.AU), the world's second-largest wheat exporter, faces significant opposition from shadow Treasurer Joe Hockey amid fierce debate over the regulation of foreign investment into Australian agriculture.
Mr. Hockey - an influential figure in the Liberal-National coalition in opposition to the government - has "serious concerns" and "misgivings" about the deal, which could see Australia's largest remaining independent grains asset slip into foreign ownership, according to a spokesman.
The spokesman didn't provided specific examples of Mr. Hockey's concerns over the deal and a spokesperson for ADM declined to comment.
The opposition's decision to oppose the Archer Daniel's bid could pile pressure on the government to reject the offer. Treasurer Wayne Swan earlier this year drew a wave of criticism from some lawmakers after he approved the purchase of a giant cotton farm, known as Cubbie Station, by a Chinese-led consortium.
A spokesperson for Mr. Swan was unreachable for comment.
To be sure, direct foreign investment into Australian agriculture is small. Agriculture, forestry and fishing makes up only 0.1% of total foreign investment with 89% of land classified as "entirely Australian owned," according to the government.
Blocking big deals in Australia is rare.
In 2011, Mr. Swan vetoed Singapore Exchange Ltd.'s proposed takeover of main stock market operator ASX Ltd.
Still, criticism of foreign buying isn't unique to Australia. Canada this month rejected the 5.18 billion Canadian dollar (US5.21 billion) takeover offer by Malaysia's state-controlled energy giant for Canadian natural-gas producer Progress Energy Resources Corp., in what was described as a surprise move that clouded the country's approach to foreign investment.
Write to Enda Curran at firstname.lastname@example.org
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