Citing national security concerns, Australia said it would probably block an effort by CK Group from acquiring the country’s largest gas and pipeline company.
SYDNEY — Li Ka-shing may be one of the most influential businessmen in Asia, but that reputation — and fear of Chinese influence — is working against his company’s ambitions to buy a critical gas operation in Australia.
The Australian government, seeking to balance national security interests and economic growth, said on Wednesday that it was likely to block CK Group, a company led by Mr. Li, a Hong Kong billionaire, from acquiring APA Group, the country’s largest gas and pipeline company. A final decision is expected in two weeks, according to a Treasury statement.
In February, Australia’s Treasury announced it was tightening rules on investments in electricity and agriculture because of questions about China’s influence on such deals. As much as $90 billion in Chinese investment has flowed to Australia since 2007.
Australia’s treasurer, Josh Frydenberg, said his “preliminary view” of CK Group’s bid of 12.98 billion Australian dollars ($9.6 billion) was to turn it down because it “would be contrary to the national interest.”
“I have formed this view on the grounds that it would result in an undue concentration of foreign ownership by a single company group in our most significant gas transmission business,” Mr. Frydenberg said in a statement.
CK Group said in a separate statement that “the preliminary view is not an adverse reflection on the CK Group, and that the Australian Government welcomes CK Group’s investments in Australia and its broader contribution to the Australian economy.”
Mr. Li’s companies already have substantial interests in Australia, but their attempts at acquiring utilities have had mixed results.
