Australian government approves Aquila takeover

Chinese iron and steel company Baosteel has been cleared to pursue a $1.1 billion take over of Aquila after getting the go ahead from Australia’s Foreign Investment Review Board (FIRB).

The FIRB wrote to Baosteel and its bidding partner Aurizon confirming that there were no objections to the acquisition.

Aquila holds a 50 per cent stake in the West Pilbara Iron Ore Project (WPIOP), a major mine, port and rail development in Western Australia.

Baosteel Resources International chairman Zhihao Dai said: “We are extremely pleased that the FIRB conditions for this transaction have been fulfilled, which further reduces the already limited conditionality associated with the offer.
“Our compelling offer provides Aquila shareholders with an opportunity to realise certain value for their Aquila shares at a significant premium to the Aquila share price prior to the announcement of the offer. At the same time, Baosteel believes the transaction, if successful, provides a genuine opportunity for the development of greenfield resources for the benefit of both Australia and China.”

Aurizon Holdings Limited managing director and chief executive, Lance Hockridge said: “Aurizon welcomes FIRB’s decision. The offer is the first step in a potential pathway to co-investment in resources and greenfield infrastructure, representing a great opportunity to co-develop world-class rail and port infrastructure in Australia, and in the process generate new jobs, boost national exports and deliver to government significant royalty revenue.”