Kirin abandons sale of Australia’s Lion-Dairy to China Mengniu

FILE PHOTO: China Mengniu milk products are displayed at a supermarket in Beijing, Feb. 13, 2014. REUTERS/Kim Kyung-Hoon

Kirin Holdings Co and China Mengniu Dairy Co said on Tuesday they have given up on the sale of the Japanese company’s wholly owned Australian dairy firm Lion-Dairy and Drinks Pty Ltd to the Chinese company.

The announcement follows a media report last week that the Australian government could block the deal in what would mark its first veto since it announced a shake-up of the country’s foreign investment laws in July.

Kirin said in a statement that the two companies had agreed to terminate the A$600 million ($430 million) transfer deal, signed last November, because approval from the Foreign Investment Review Board (FIRB) was unlikely to come.

The Australian Financial Review reported last week that Treasurer Josh Frydenberg had gone against the advice of the FIRB, which was in favour of approving the deal. The deal had won approval from Australia’s competition regulator in February.

The revised laws give the treasurer last-resort power to vary or impose conditions on deals even after FIRB approval, or force divestment in the event of a national security risk.

The changes came against the backdrop of increasing Sino-Australian tension after Canberra called for an international inquiry into the origins of the novel coronavirus, which was first reported in China at the end of last year.

The sale of Lion-Dairy would have advanced Kirin’s strategy of offloading underperforming assets, while giving the Chinese government part-owned company control of Australian household brands like Pura, Dairy Farmers and Moove flavoured milk.

“This is an unfortunate result, but the revival and restructuring of Lion-Dairy and Drinks are a top priority and we will continue to look for the best scenarios for the business with Lion,” Kirin said in a statement.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.