Chinese Enterprises Speed Up Acquisition Of Australian Cotton Merchants To Increase Competitiveness In Australia

Wayne Swan, Australia's deputy prime minister and Minister of state treasury, approved last week that the consortium owned by Shandong Ruyi group (000626, stock bar) (000626, stock bar) can participate in the largest acquisition of Australia.

Production of Shangqiu is more competitive than the company.

Over the past few days, there have been reports of major acquisitions in the main media in Australia, expressing concern about the successful takeover of Shandong Ruyi (002193, stock bar) (002193, stock bar).

Who has touched the nerve of Chinese companies acquiring Australian cotton traders?

Australians are understandably concerned about the ownership of Kewpie Corporation, not only because Kewpie Corporation is the largest cotton producer in Australia, producing 1/10 of the total output of Australia, but also because the company owns 93 thousand hectares of land in southern Queensland, and the Barran river flows through it. There are many large dams and irrigation facilities in the territory, holding the largest water license in Australia.

However, Kewpie Corporation owed more than 320 million Australian dollars and voluntarily entered the regulatory process since 2009.

The company's creditors, including the National Bank of Australia and the sun group bank, have been selling the Kewpie Corporation's cotton products.

Look at the acquisition conditions of Shandong's Ruyi.

According to the request of the Australian government, once the acquisition is successful, the consortium of Ruyi, a local textile company in Shandong and Australia's local textile enterprise, has to reduce its shareholding ratio from 80% to less than 51% within 3 years. The acquirer also promises not to reduce jobs, and the treatment of all existing employees will remain unchanged; the local family business, RP, will operate and manage Kewpie Corporation in the Kewpie Corporation.

As for water subsidies, the acquirers also agreed to sell all unused quotas in the water market, which means that the government can buy back all subsidies through this market.

In addition, as the purchase amount may exceed 300 million Australian dollars, the acquisition was also submitted to the Australian Foreign Investment Review Committee in accordance with the regulations, and the Australian national interest audit was approved.

Once the takeover is successful, Shandong Ruyi must report the progress to the committee every 12 months, so that the other side can verify whether or not the promise of the takeover is fulfilled.

To be fair, such acquisition terms are not comprehensive, for the local economy, employment, and Australia.

The care of the industry is not so considerate.

Even so, there are still Australian legislators jumping out to repeat the old tune of "protecting the interests of the state".

Not to mention that they ignore the fact that Shandong's 30% of their shares belong to the fact of Itochu commerce of Japanese enterprises. According to their logic, the welfare of the existing employees of the Kewpie Corporation is not national interests. The local economy continues to be dragged by Kewpie Corporation, not the loss of national interests. The whole Australian cotton industry continues to be volatile in the interests of Australia?

With the acceleration of Chinese enterprises' investment in Australia and the expansion of their business in Australia, this kind of conditional objection frequently occurs in Australia, and often turns a common business case into an event that affects relations between the two countries. Before that, HUAWEI was banned from providing equipment to Australia's national broadband network project, which is a typical example.

Such objections are conditioned, because they totally ignore China's highly market-oriented economy after more than 30 years' efforts. Ignoring Chinese enterprises, including state-owned enterprises, have already taken the road of listing, and even some Chinese enterprises have been internationalized in capital.

These Chinese enterprises, like all other enterprises in the world, operate in accordance with market rules.

Back to Shandong's Ruyi's acquisition, through the acquisition, Ruyi group can obtain stable and high-quality raw material supply, so in the world.

It is more competitive, which is why it is willing to meet Australia's many restrictive conditions.

The Australian side should give Chinese enterprises a fair and non discriminatory investment environment, which is in the interests of both sides.