Shougang Concord International Enterprises, a unit of mainland steelmaker Shougang Corp, has scrapped the proposed purchase of 19.73 per cent of Australian iron ore miner Mount Gibson Iron after the deal was rejected by the Australian regulators.
Australia's Takeover Panel, which governs mergers and acquisitions, said in a statement yesterday that the acquisition attempt by Shougang Concord showed that it was contriving with another of its parent's subsidiaries, Apac Resources, to gain control of Mount Gibson.
The move was found to be in violation of Australia's corporate code.
Shougang Holding (Hong Kong), a wholly owned subsidiary of Shougang Corp, owns 40.71 per cent of Shougang Concord and 18.05 per cent of Apac Resources.
Apac, which controls 20.22 per cent of Mount Gibson, is the iron ore miner's largest shareholder.
In January, Shougang Concord bought 156.8 million Mount Gibson shares, representing a 19.73 per cent stake, from Russia's Metalloinvest for A$408 million (HK$2.91 billion) or A$2.60 a share.
The Mount Gibson deal raised eyebrows within the financial community.