US-based Archer Daniels Midland's (ADM) proposed acquisition of grain handler GrainCorp for A$3.4bn ($3.1bn) has been rejected by the Australian Government over concerns that the deal would go against the national interest.
The move comes after industry participants, particularly growers in eastern Australia, have expressed concern that the proposed deal could reduce competition and impact growers' ability to access the grain storage, logistics and distribution network.
Treasurer Joe Hockey said that the decision comes on the heels of the Foreign Investment Review Board (FIRB) split on whether to allow the deal to proceed.
In October, the deadline for FIRB has been extended until 17 December to make a decision on to approve, impose conditions or reject the deal.
Hockey added, "Given that the transition towards more robust competition continues and a more competitive network is still emerging, I consider that now is not the right time for a 100 per cent foreign acquisition of this key Australian business.
ADM chairman and CEO Patricia Woertz said, "We are disappointed by this decision. We are confident that our acquisition of GrainCorp would have created value for shareholders of ADM and GrainCorp, as well as grain growers and the Australian economy.
"As owner of 19.85 percent of GrainCorp, we will look to work with them to maximize returns on our investment and create value for both companies."
ADM had agreed to pay A$12.20 ($12.85) per share in cash to GrainCorp shareholders and a one-time A$1 ($1.02) per share special dividends.
GrainCorp, based in Sydney, Australia, receives, handles and exports grain and other bulk commodities, including wheat, barley and oilseeds. It operates about 280 storage sites and seven grain port terminals.
