Australia Approves China State Grid Purchase of SP AusNet StakeJames Paton
China State Grid Corp.’s purchase of Singapore Power Ltd. assets in Australia was approved by the Australian government as the state-owned utility expands overseas.
“Australia is open for business, and we welcome foreign investment when it is not contrary to the national interest,” according to a statement today from Treasurer Joe Hockey.
China State Grid, the nation’s largest power distributor, agreed in May to pay Singapore Power A$824 million ($730 million) for 19.9 percent of SP AusNet. It also agreed to buy 60 percent of Singapore Power’s energy assets held by SPI (Australia) Assets Pty, known as Jemena, for an undisclosed amount. Jemena manages more than A$5 billion of assets.
The approval follows Australia’s ruling earlier this month that China’s Yanzhou Coal Mining Co. doesn’t need to cut its stake in local unit Yancoal Australia Ltd. to below 70 percent and instead can move to 100 percent ownership. Australia in November blocked Archer-Daniels-Midland Co.’s takeover of GrainCorp Ltd. 12 weeks after Prime Minister Tony Abbott’s election-night vow that Australia is open for business.
China State Grid’s Singapore Power accord is part of its global acquisition plan to boost profits limited by caps on electricity charges at home. Buying the stakes from Singapore Power adds to China State Grid’s investment in Australia after it agreed last year to buy 41.1 percent of ElectraNet Pty, the operator of the main transmission network in South Australia.
The acquisition was approved on condition at least half of the members appointed by State Grid to the boards of SP AusNet and Jemena must be Australian citizens who are ordinarily residents of the country, Hockey said.