Since failing to obtain the approval of the Foreign Investment Review Board, a $600 million offer to sell Pura milk, Dare iced coffee and Yoplait yoghurt to a Chinese firm has been terminated.
Japanese-owned beverage company Kirin revealed last November that it was selling Lion Dairy and Drinks to Mengniu Dairy.
Yet the agreement soon got entangled in the larger diplomatic tensions between Australia and China.
Beijing has hit several Australian exporters with trade sanctions while several federal MPs and senators have campaigned against the Lion deal, warning it could undermine local supplies of milk.
The Australian Financial Review confirmed last week that Treasurer Josh Frydenberg had agreed he would not give the green light for the sale to Lion.
Kirin today issued a statement stating that it had abandoned the deal.
“Lion notes that China Mengniu Dairy Company Limited has been awaiting the outcome of the Foreign Investment Review Board review of its proposed purchase of Lion Dairy & Drinks,” the statement said.
“We are disappointed with this outcome and will now consider pathways forward in relation to the Lion Dairy & Drinks business.”
Lion has a range of popular brands including Dairy Farmers, Masters, and Pura Milk.
This range includes iced coffee from the Dare and Farmers Union; Big M, Dairy Farmers and Pura Classic flavoured milk; Vitasoy soy milk and coconut milk; Daily Juice, The Juice Brothers and Berri juice brands; and Yoplait yoghurt approved.
The Lion sale was approved in February by the Australian Competition and Consumer Commission, after considering the possible effect on competition.
The Federal Government is currently working on a broader reform of foreign investment laws that would allow the Treasurer to sign off on foreign investments with consequences for national security.
The Coalition adopted temporary new legislation earlier this year to shield financially distressed Australian businesses from international takeovers.
The Federal Government last year approved the sale to Mengniu of Australian infant formula business Bellamy’s for $1.5 billion.