King & Wood Mallesons

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Treasurer Hockey rejects proposed ADM takeover of Graincorp

By Alice Rumble and Malcolm Brennan

In a surprising move, treasurer Hockey has ruled against the proposed acquisition by US company Archer Daniel Midland (ADM) of Graincorp Limited (Graincorp). The decision to reject the application, rather than to impose conditions on an approval, is in stark contrast to previous foreign investment decisions by former Australian governments on both sides of politics.

ADM has expressed disappointment that the government did not seek undertakings in relation to the proposal as many commentators expected. In his speech, the treasurer referred to the fact that ADM had announced several commitments in respect to its proposed acquisition of Graincorp. These included commitments to invest $200m (£122m) in Graincorp’s grain storage and handling network, to improve rail infrastructure and to impose caps on grain handling and storage charges at silos and ports. Clearly, these were not sufficient to convince the treasurer that the proposal was not contrary to the national interest.

The decision to reject the proposal has come after significant pressure on the treasurer to do so from the National Party and farmers. During his speech this morning, the treasurer noted the importance of ensuring public support for the foreign investment regime. This is a strong indication of a new criterion to be considered as part of the national interest test…

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