The Australian government yesterday approved the sale of one of the nation’s largest construction companies, John Holland Group Pty Ltd, to China Communications Construction Company International Holding Ltd.
Australian Treasurer Joe Hockey said he approved the sale under foreign investment rules because it was in Australia’s national interests.
CCCC International is a wholly owned subsidiary of the state-run China Communications Construction Co (CCCC, 中國交通建設), the fourth-largest construction firm in the world by revenue.
Leighton Holdings Ltd entered a binding agreement with CCCC in December last year to sell John Holland for about A$1.15 billion (US$880 million), subject to adjustments.
The deal required approval of the Foreign Investment Review Board (FIRB) that ensures that such foreign takeovers are in Australia’s interests.
“The government welcomes foreign investment where it is not contrary to our national interest,” Hockey said in a statement.
Hockey said he had sought advice on several issues — including the World Bank debarring CCCC from contracts until 2017 over fraudulent practices used in a road-building project in the Philippines in 2009.
“As a result, appropriate arrangements have been put in place to mitigate any concerns in relation to this issue and I am satisfied that this investment is not contrary to our national interest,” Hockey said, without elaborating.
CCCC is listed on the Hong Kong and Shanghai stock exchanges and has a presence in more than 80 countries.
CCCC reportedly expressed surprise by how long the approval process took, having told the Hong Kong stock exchange that the deal would be finalized by the end of last month.
Among issues that the FIRB had considered before approving the deal were John Holland’s contracts with Australia’s Department of Defence.
John Holland has more than 5,600 employees in eight countries.
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