Lion Dairy & Drinks owner Kirin has given up on the sale of Lion to Mengniu. The joint announcement follows reports in the Australian Financial Review that Treasurer Josh Frydenberg had no plans to approve the sale, despite the Australian Competition and Consumer Commission approving the transaction in February. Kirin said in a statement that the companies have agreed to terminate the $600m deal as approval from the Foreign Investment Review Board (FIRB) was “unlikely to come.” The Australian Financial Review has reported that FIRB and Treasury supported the transaction, but the Treasurer “secretly shunned” the advice. The sale of Lion Dairy would have placed local brands such as Pura and Dairy Farmers under Mengniu’s control. Kirin said revival and restructuring of Lion Dairy & Drinks remained a top priority.
Earlier this year, the Australian Government lowered the dollar value of every foreign bid that must be screened to zero, meaning businesses looking for offshore investment have been waiting up to six months to receive approval. The temporary change was made in late March to stop opportunistic foreign buyers at the peak of panic about COVID-19. The Mengniu purchase of infant formula maker Bellamy’s was approved by Frydenberg last year after clearing a national security test.