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Australia approves $3bn utility takeover by Hong Kong firm

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Australia’s government has approved a Hong Kong conglomerate’s AUD4bn ($3bn) bid to take over Australian utility Alinta Energy.

The deal will allow Chow Tai Fook Enterprises to gain control of Alinta’s 1957 MW generation portfolio and 800,000 electricity and gas customers in four of Australia’s six states.

The nation’s treasury department said the approval came with strict conditions although no further details were provided.

According to Alinta, closure on the deal is expected be reached by the end of this month.

Chow Tai Fook is best known for its jewellery business, the world’s largest, while in Australia it owns shares in resorts and real estate. The firm said it plans to expand Alinta’s business through energy sector investments.

Australia’s conservative government has previously cited national interest in blocking foreign takeover bids for energy companies, such as State Grid Corporation of China’s August 2016 bid to acquire a majority stake in grid operator Ausgrid. At the time, Treasurer Scott Morrison said the government would continue to nix such foreign efforts.

But in another major departure from this policy, last week the government approved a bid from a consortium led by Hong Kong-based Cheung Kong Infrastructure Holdings Ltd (CKI) for energy infrastructure and power distribution firm Duet Group. The government had previously blocked a bid by CKI for Ausgrid.