CKI's Bid for Oz APA Officially Rejected

The Australian government has officially rejected Hong Kong-based CK Infrastructure Holdings’ A$13bn (US$9.8bn) takeover of gas infrastructure company APA Group.

“Today the consortium led by CK Asset Holdings Limited (CK Group) has been advised of my final decision that its current proposed acquisition of APA Group would be contrary to the national interest. I have formed this view on the basis that it would result in a single foreign company group having sole ownership and control over Australia’s most significant gas transmission business,” Treasurer Josh Frydenberg said November 20, two weeks after his preliminary ruling.

APA Group November 21 issued a statement saying the deal would not proceed. “APA Group last night received notice from the CKI Consortium that the Federal Treasurer had notified it of his decision to prohibit the trust schemes under which the CKI Consortium would acquire all of the stapled securities in APA (Schemes). APA and the CKI Consortium therefore agreed to terminate the Implementation Agreement and the bidder’s proposal will not proceed further,” APA said. The takeover offer was first announced in June this year.  

The APA Group is the largest gas transmission system owner in Australia, owning 15,000 km of pipelines representing 56% of Australia’s gas pipeline transmission system, including 74% of New South Wales and Victorian pipelines and 64% in the Northern Territory. It also supplies gas for part of all mainland capital cities’ consumption, gas-fired electricity generation assets and LNG exports.

“With the CKI Consortium proposal not proceeding, the way ahead for APA is very clear – we will continue to work on ‘APA’s Plan A’, which is the successful growth strategy that we have employed for almost two decades,” APA chairman, Michael Fraser said in a separate statement.