Treasurer’s Decision to Reject ADM’s Proposed Acquisition of GrainCorp

Statement by BCA Chief Executive Jennifer Westacott on the Treasurer’s Decision to Reject ADM’s Proposed Acquisition of GrainCorp

“On the face of it, the Treasurer’s decision to reject ADM’s proposed acquisition of GrainCorp risks undermining the federal government’s statement that Australia is open for business,” Business Council of Australia Chief Executive Jennifer Westacott said.

“The Treasurer’s statement that sufficient competition had not emerged in grain handling to allow the acquisition is at odds with the ACCC’s view that there was unlikely to be substantially lessened competition as the merged entity would continue to face competition from a number of sources.

“While it would be inappropriate to discuss the merits and particulars of the decision without all available information, it has raised significant issues that need to be explored.

“It’s crucial that, where possible, the government further details the competitive issues that it was concerned about and how this relates to the national interest test so it is clear to global investors what the unique circumstances of this case are.

“It is important this decision does not increase uncertainty in the global community about the rules of the game on competition and Australia’s policy settings on foreign investment generally.

“We would hope the government will take steps to signal to the world that Australia does in fact welcome foreign investment, and ensure that this case does not set a precedent or send a wrong signal to foreign investors.

“It is clear that there is a need to build confidence within the Australian community about the important role that foreign investment has historically played in supporting Australia’s growth, prosperity and jobs.

“The national interest test, which has served Australia well over many decades by providing confidence to the Australian people about foreign investment, is a complex consideration of a number of different issues.

“We need to look carefully at the reasons for this decision, and transparency in the national interest test is key to understanding the relevant issues.

“While it is encouraging that the government has approved 130 significant foreign investment applications since coming into office, this case demonstrates the importance of transparency in communicating the reasons for rejection of major applications,” Ms Westacott said.

Action Plan for Enduring Prosperity: Embracing Global Engagement (July 2013)