Advertisement

Joe Hockey approves $1.4b takeover of Primo by Brazilian company

The Federal Treasurer has approved a $1.4 billion takeover bid by Brazilian meat company JBS, to acquire Australian smallgoods producer Primo.

Joe Hockey's decision follows an announcement by the Australian Competition and Consumer Commission (ACCC) last month that it would not oppose the move.

The final go-ahead is conditional on JBS being able to maintain third party access to Primo's abattoir in the northern New South Wales town of Scone.

Liberal Senator Arthur Sinodinos told Sky News this condition was proof the approval system is effective.

"It's a good announcement, because it demonstrates that we look at foreign investment proposals on their merits — and the whole point of having the foreign investment review board there is to provide some greater assurance to the public," he said.

The bid had previously raised concern among some in the livestock industry that it would narrow the number of meat buyers in the market as Primo's operations included five pig processing plants across Australia and New Zealand, employing more than 3,000 people.

The ACCC received submissions from a range of interested parties, including farmers, competing abattoirs, and meat and smallgoods suppliers and customers.

But while the commission determined that, in this instance, the proposed acquisition would be unlikely to raise significant competition concerns, it said it was wary of the potential impact of further consolidation of abattoirs.

After the announcement, there were calls for a review of the decision but ACCC chairman Rod Sims said at the time there was no new information to prove the deal would substantially lessen competition in the beef cattle industry.