Australia says no to US acquisition of GrainCorp

The Australian government rejected yesterday the A$3.4 billion (HK$24 billion) sale of GrainCorp to American agribusiness giant Archer Daniels Midland, saying it went against the national interest.

Treasurer Joe Hockey said the sector was still moving towards more robust competition and that a foreign takeover of the biggest grain handler in eastern Australia could undermine public support for foreign investment in general.

"Now is not the right time for a 100 per cent foreign acquisition of this key Australian business," he said, a decision that sent GrainCorp shares diving more than 20 per cent from Thursday's close.

The bid met strong opposition from grower groups and the National Party, which is part of the governing coalition that declared Australia "open for business" after winning September elections.

"A further significant consideration was that this proposal has attracted a high level of concern from stakeholders and the broader community," Hockey said in a statement.

He said the Foreign Investment Review Board assessing the proposal had been split on whether to give the green light to the takeover, which was "one of the most significant proposed acquisitions of an agricultural business in Australia's history".