Hong Kong's CKI clears competition hurdle in bid for Australia's APA Group
* CKI needs Australian foreign investment approval
* Gas supply, prices in the political frame
* APA shares climb but remain well below offer price
(Adds political context)
By Sonali Paul
MELBOURNE, Sept 12 (Reuters) - Hong Kong's CK Infrastructure
Holdings Ltd won approval on Wednesday from
Australia's competition watchdog for a A$12.98 billion ($9.2
billion) takeover of gas pipeline operator APA Group,
but still needs clearance from the government.
The deal would make CKI - part of an empire founded by Hong
Kong tycoon Li Ka-shing - the major gas pipeline player on
Australia's east coast in what would be the third biggest
takeover, including debt, of an Australian company.
The Australian Competition and Consumer Commission (ACCC)
said the takeover would not change market dynamics on the east
coast, given that CKI was not a big competitor in that market.
In Western Australia, where CKI already owns the major gas
pipeline in the state competing against APA, the competition
watchdog accepted a court-enforceable undertaking from the CK
Consortium to divest APA's gas pipelines there.
The undertaking addressed the regulator's concerns about the
loss of competition in Western Australia's gas pipeline
development market, it said.
APA Group, Australia's biggest gas pipeline company, said in
a separate statement that the bid still required approvals from
the Foreign Investment Review Board (FIRB), APA security holders
and the Supreme Court of New South Wales.
APA shares have been trading well below the offer price of
A$11.00 per stapled security amid uncertainty over whether the
ACCC and FIRB would approve the deal.
With one hurdle cleared, APA's shares rose 2.3 percent to
A$9.99, but were still below the offer price as approval from
the government is seen as a tougher obstacle amid political
concerns about Australia's soaring gas prices and diminishing
The country's heaviest gas users are in the southeastern
states and have become increasingly dependent on gas from the
northeastern state of Queensland which flows on APA's pipelines.
Australia's new treasurer, Josh Frydenberg, who was
previously the energy minister, will have the final say on
CKI was not immediately available for comment.
($1 = 1.4051 Australian dollars)
(Reporting by Sonali Paul; additional reporting by Chandini
Monnappa in Bengaluru; editing by Richard Pullin)
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