SYDNEY (Reuters) — Competition concerns about Archer Daniel Midland Co.’s $2.9 billion takeover of GrainCorp should be addressed by regulation, the Australian company said as political tensions over the deal resurfaced.
Australian treasurer Joe Hockey last month extended the time period for a foreign investment decision on the bid, which is unpopular with the new coalition government’s junior partner, the rural-based National Party.
Now he has criticized speculation about the impending decision, due by Dec. 17, and public comment from coalition politicians who oppose the deal.
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“I will not be bullied or intimated by anyone when it comes to making decisions on the national interest,” he said.
Hockey and prime minister Tony Abbott have declared Australia to be open for business since the coalition won power in September, and the bid has been widely expected to be approved.
“I believe we have a tremendous opportunity in the Australian agricultural sector, and attracting investment is a really, really important part of that,” said Alison Watkins, managing director and chief executive officer of GrainCorp said Nov. 7.
“If we turn our backs on it, it is like turning a tap off a garden that is just about to bloom, to stunt something instead of getting something beautiful.”
Opponents of the GrainCorp takeover have cited concerns over selling national assets to foreign companies and decreased competition as reasons to reject the deal.
“I don’t believe the facts substantiate any concerns over a lack of competition, but those can be addressed through regulation,” Watkins said.
Australian authorities reject only a handful of foreign investment deals each year, and ADM’s bid for GrainCorp is far from the first foreign deal in the agriculture sector.
The sector has seen a surge in merger and acquisition interest in recent weeks, most notably in the dairy industry where Australia’s Warrnambool Cheese and Butter Factory Company Holdings Ltd. has attracted three full takeover offers.
