China’s bid for Australian construction giant Probuild blocked on ‘national interest’ grounds

Tensions between Australia and China show no signs of abating, with the Treasurer blocking its bid to take over a Melbourne-business.

Treasurer Josh Frydenberg has once again blocked a proposed Chinese takeover of an Australian company on national interest grounds as trade tensions with the Asian superpower continue to simmer.

South Africa-based building and civil engineering contractors Wilson Bayly Holmes Ovcon (WBHO) has told the Johannesburg Stock Exchange the proposed acquirer of its 88 per cent stake in Melbourne-headquartered Probuild, China State Construction Engineering Corporation, has abandoned its bid.

WBHO said the Chinese company withdrew its application to the Foreign Investment Review Board following advice it would be rejected by the federal government “on the grounds of national security”.

“WBHO notes that after significant time, investment and ongoing commitment from both WBHO and the potential acquirer in progressing the proposed transaction, due diligence was completed and commercial terms … were otherwise materially agreed between the parties,” it said in a statement.

It’s not the first time the Treasurer has intervened before a FIRB decision. Picture: NCA NewsWire/Gary Ramage

“WBHO remains optimistic about the fundamentals of Probuild and its prospects in the Australian market and continues to assess all potential opportunities for Probuild to maximise shareholder value and the value and potential of Probuild.”

Mr Frydenberg’s office would only say: “The government does not comment on the application of the foreign investment screening arrangements as they apply or could apply to particular cases.”

Probuild declined to comment.

In August, the Treasurer intervened before the FIRB could rule on Japanese-owned beverage giant Kirin’s plan to sell its Melbourne-based Lion Dairy and Drinks subsidiary to China Mengniu Dairy, saying his “preliminary view” was the deal “would be contrary to the national interest”.

The Ritz-Carlton at Elizabeth Quay in Perth is one of Probuild’s recent projects. Picture: Ross Swanborough.

The Probuild knock-back is the latest development in escalating trade tensions between China and Australia that has involved bans and punitive tariffs on Australian exports, including beef, barley, wine and coal.

Probuild executive chairman Simon Gray has reportedly labelled Mr Frydenberg’s rejection of the deal “a joke”, citing rival John Holland’s acquisition by China Communications Construction Company in 2015.

The company’s prominent projects include Aurora Melbourne Central and Greenland Centre in Sydney – which are the tallest residential towers in both cities – and The Towers and Ritz Carlton at Perth’s Elizabeth Quay.

Originally published as China’s bid for Australian construction giant Probuild blocked on ‘national interest’ grounds