Shares in Australian grain handler GrainCorp plunged more than 20 percent on Friday after Canberra blocked a controversial $3.1 billion bid by US food giant Archer Daniels Midland.
Australian Treasurer Joe Hockey told reporters before the stock market opened that he rejected the 100 percent takeover of GrainCorp because it was not in the national interest.
“I consider that now is not the right time for a 100 percent foreign acquisition of this key Australian business," said Hockey, who belongs to the conservative Coalition government.
He said the industry was "going through transition and now is not the right time to have all the major players foreign owned.”
"A further significant consideration was that this proposal has attracted a high level of concern from stakeholders and the broader community," Hockey said.
"I therefore judge that allowing it to proceed could risk undermining public support for the foreign investment regime and ongoing foreign investment more generally. This would not be in our national interest."
ADM, the world’s biggest processor of corn, already owns a 20 percent stake in GrainCorp, which is Australia’s biggest grain merchant. It launched a bid to buy the remaining 80 percent last year, but it was strongly opposed by grain growers who were concerned about the lack of competition in the market.
GrainCorp’s board backed the acquisition, but it required the approval of the Foreign Investment Review Board, which decides whether proposed foreign takeovers pass the national interest test.
ADM and GrainCorp said they were disappointed by the decision.