SYDNEY Dec 20 The Australian government has
approved the purchase of stakes worth as much as A$5 billion
($4.4 billion)in the country's power companies by State Grid
Corp of China (SGCC), the world's largest state
Treasurer Joe Hockey on Friday gave the greenlight to State
Grid's purchase of 19 percent of electricity supplier SP Ausnet
, and 60 percent of energy infrastructure company SPI
(Australia) Assets Pty Ltd (SPIAA).
The approval comes just weeks after the Treasurer blocked
the A$2.8 billion takeover of GrainCorp by U.S.
agribusiness giant Archer Daniels Midland (ADM), citing
Lawyers and bankers who work in mergers and acquisitions
warned that decision was likely to spook some international
investors who already view Australia as a tough place to do
"Australia is open for business and we welcome foreign
investment when it is not contrary to the national interest,"
Hockey said in a statement on Friday.
State Grid has been building its presence in the Australian
energy sector, buying a 41 percent stake in unlisted South
Australian electricity supplier ElectraNet from the Queensland
state government's Powerlink last year.
As a condition of approval for the latest deals, at least 50
percent of the new board members to be appointed to SP AusNet
and SPIAA must be resident in Australia.
SP AusNet, listed in Australia and Singapore, owns and
operates electricity and gas distribution assets in Victoria
state, including the state-wide electricity transmission
network. SPI will continue to hold a 31.1 percent stake in SP
AusNet and SP AusNet will remain publicly listed. SPIAA, which
uses the trading name Jemena, owns electricity and gas
State Grid announced in May it was purchasing the stakes
from a unit of Singapore's Temasek. Financial terms
were not disclosed, but Reuters calculations put the value at
more than A$5 billion including debt.