Finance Finance News PM warned not to block GrainCorp sale

PM warned not to block GrainCorp sale

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Prime Minister Tony Abbott’s reported reluctance for a foreign takeover of Australia’s largest agribusiness should have no bearing over any approval or rejection of the bid.

Treasurer Joe Hockey needs to make a decision about the $3.4 billion bid by US food giant Archer Daniels Midlands for GrainCorp by December 17.

Under the Foreign Acquisitions and Takeovers Act, it is solely the treasurer’s decision whether to approve or reject the ADM bid.

The law specifies that, if Mr Hockey prohibits the takeover, he needs to be satisfied it is contrary to the national interest.

The treasurer is on the record as saying he will not be bullied or intimidated by “anyone” into making a decision one way or the other.

Coalition figures say Mr Abbott is inclined to say no to the purchase or make conditions so onerous as to make it unviable, The West Australian said on Friday.

The federal opposition says the report is extremely concerning.

“The prime minister must guarantee he will not interfere in this process,” shadow treasurer Chris Bowen said in a statement.

The takeover is opposed by The Nationals, some rural Liberals and eastern wheat-belt growers.

But WA Liberal senator Dean Smith, like others in the nation’s biggest wheat-growing state, is backing the ADM bid.

“This deal … ticks a lot of boxes for the 21st century,” he told parliament on Thursday.

Australia is a big exporting country and needs the “absolute best infrastructure” and best global connectivity.

“We need competition – this is the absolute imperative that underscores everything,” he said.

Senator Smith said debate about foreign investment should not be used as a Trojan horse by those seeking to reverse the benefits of deregulating the wheat export market.

GrainCorp and ADM executives are expected to appear before a resumed Senate inquiry into the takeover.

Liberal senator Bill Heffernan has vowed to ask “difficult” questions.

“The debate so far has been informed by lobbyists with workshopped words and a series of lunches,” he told The West Australian.