Conflict Between China and Australian Governments Causes Corporate 'Deal' to Fall Through

Australia, China's Mengniu's 'Lion Dairy and Drinks' M&A Blocked
China Investigates Anti-Dumping on Australian Wine Amid Ban on Australian Beef Imports

[Asia Economy Beijing=Special Correspondent Jo Young-shin] A deal worth 600 million Australian dollars (approximately 510 billion KRW) has fallen through due to conflicts between China and Australia.

Chinese dairy manufacturer Mengniu (蒙牛) has withdrawn its plan to acquire Australia's Lion Dairy & Drinks after failing to obtain approval from the Australian government, Chinese media reported on the 26th.

Mengniu had agreed last November to acquire Lion Dairy & Drinks from Kirin Holdings for 600 million Australian dollars.

The collapse of this acquisition is due to the Australian government's decision to disallow the takeover.

Earlier, Australian Treasurer Josh Frydenberg stated in a press release that a preliminary conclusion was reached that Mengniu's acquisition of Lion Dairy & Drinks was against the national interest, and this position was communicated to Mengniu. Treasurer Frydenberg holds the final approval authority over foreign investments under the revised Australian Foreign Investment Law enacted in June.

The relationship between China and Australia has severely deteriorated as the Australian government raised responsibility claims regarding the COVID-19 pandemic. China has suspended imports of Australian beef and imposed retaliatory measures such as tariffs on agricultural products including barley.

The Chinese government has also launched an anti-dumping investigation into Australian wine, deepening the rift between the two countries. The failure of Mengniu's M&A of Lion Dairy & Drinks had already been anticipated.

The Australian government's decision has caused discomfort on the Chinese side.

Zhao Lijian (趙立堅), spokesperson for the Chinese Ministry of Foreign Affairs, said at a regular briefing on the 25th, "We hope the Australian government will provide a fair and equitable business environment for Chinese companies operating and investing in Australia."

This content was produced with the assistance of AI translation services.