South Africa’s WBHO says buyer drops bid for Australian construction firm

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South Africa's WBHO says buyer drops bid for Australian construction firm

SYDNEY, Jan 12 (Reuters) – South Africa’s Wilson Bayly
Holmes-Ovcon Ltd (WBHO) said a potential sale of its
88% stake in Australian construction firm Probuild would not
proceed after Australia rejected it citing concerns about
national security.

The buyer terminated the deal after it was informed by
Australia’s Foreign Investment Review Board (FIRB) that its
investment application in Probuild would not get approved, WBHO
said in a statement on Monday.

The construction and engineering company did not specify the
buyer’s identity or the total value of the deal.

Australian media reported that China State Construction
Engineering Corp had offered A$300 million ($231
million) for WBHO’s stake in privately held Probuild.

“The government does not comment on the application of the
foreign investment screening arrangements as they apply or could
apply to particular cases,” Australia Treasurer Josh Frydenberg
said in an emailed response to Reuters.

WBHO said due diligence on the deal was completed and terms
of the proposed transaction were otherwise materially agreed
between the parties.

Australia in June said foreign investors would face greater
scrutiny when bidding for sensitive assets, regardless of the
size of the deal and whether the buyer was private or
state-owned, as it unveiled the biggest shakeup of foreign
investment laws in almost half a century.

Australia did not single out China, or any other country,
when announcing the overhaul, but the Chinese government has
previously raised concerns with Australia about changes to its
foreign investment rules.

Japan’s Kirin Holdings Co in August gave up on the
sale of its wholly owned Australian dairy firm Lion-Dairy and
Drinks Pty Ltd to China Mengniu Dairy Co saying FIRB
was unlikely to approve the deal.
($1 = 1.2995 Australian dollars)

(Reporting by Renju Jose in Sydney
Editing by Matthew Lewis)