AUS
NZ
UK
CA
USA
IND
_01_22_2025_07_55_26_045637.jpg)
China State Construction Engineering Corporation’s bid to acquire a major building contractor Probuild has been pushed back by the federal government on grounds of national security.
Image Source: Shutterstock
Federal Government Pushed back The Proposal on Account of National Security
The state-owned Chinese company has now withdrawn its offer after the treasurer Josh Frydenberg declared the proposed transaction risk to the national security citing the deep involvement of the construction company in the economic and social wellbeing of the country.
In the latest announcement following the Cautionary Announcement released on SENS on 9 December 2020 and Cautionary Announcement released on SENS on 28 October 2020, Wilson Barley Holmes – Ovcon Limited (WBHO), mentioned that the Group has received the news of withdrawn from the potential acquirer for its 88 per cent stake in Probuild.
WBHO received an unsolicited indicative, non-binding & conditional proposal from a major state-owned Chinese company to acquire its interest in Probuild; however, the offer has been now withdrawn, following the advise from the federal government that the same shall be rejected on grounds of national security.
Is the Stoppage Strategical or Political?
Many industry experts believe that the rejection of the deal, which has been under consideration with the Foreign Investment Review Board, has been rejected on political grounds, and is further anticipated to escalate trade spat between Beijing and Canberra.
Image Source: Shutterstock
The trade spat between both nations has already taken a toll on many commodities including barley, coal, wine, and beef along with many other exports.
Furthermore, the trade spat between red dragons and Australia has already cost the domestic wheat industry to miss out on the Chinese wheat buying spree.
To Know More, Do Read: Dry weather across northern hemisphere hits wheat production, Is Australia in a sweet spot?
WBHO To Keep Pursuing its Interest Sale
The halt to the deal, which has seen a significant time, investment, and commitment from both WBHO and the state-owned Chinese buyer along with the completion of due diligence, has come as a shocker for WBHO.
However, in its latest public announcement, WBHO mentioned that the Group remains optimistic over the fundamentals of Probuild and its prospects in the Australian market and would continue its pursuit to sell its stake in the construction company to maximise its shareholders’ wealth.
Probuild has a track record of delivering some of the major public projects across the nation including Cbus Property-owned Victoria Police Headquarters.
