China’s Mengniu calls off deal to buy Australian drinks company after failing to get Canberra’s approval
- China Mengniu, one of China’s largest dairy firms, agreed in November to buy Lion Dairy & Drinks from Japan’s Kirin Holdings for A$600 million (US$429 million)
- News reports say Australian Treasurer Josh Frydenberg nixed the deal, contrary to advice from Foreign Investment Review Board to approve the purchase
China Mengniu Dairy will not acquire Japanese drinks company Kirin Holding’s Australia-based asset Lion Dairy & Drinks after failing to get approval from the Australian government, the latest incident in escalating trade tensions between Beijing and Canberra.
Hong-Kong listed Mengniu Dairy agreed in November to pay A$600 million (US$429 million) for Lion Dairy & Drinks, well-known locally for its Berri and Pura brands of milk as well as the Mac’s and Hopt drinks brands sold in New Zealand.
The sale of the Sydney-based company was conditional on approvals by the Australian Competition and Consumer Commission (ACCC) and the Australian Foreign Investment Review Board (FIRB). While the ACCC gave the green light in February, it was reported in local media last week that Australian Treasurer Josh Frydenberg went against the FIRB’s approval of the deal.
The Australian Treasury had also advised Frydenberg, who oversees the investment review board, to approve the deal.
On Tuesday, both Mengniu Dairy and Kirin announced they had terminated the transaction.
Given this approval has not been secured to date and is unlikely to be forthcoming at this time, regrettably the parties had agreed to terminate the agreement
“FIRB approval is a condition precedent to the agreement. Given this approval has not been secured to date and is unlikely to be forthcoming at this time, regrettably the parties had agreed to terminate the agreement,” Kirin said in a statement.
