The $600 million deal to sell Lion Dairy & Drinks has fallen through after failing to gain Foreign Investment Review Board approval.
Lion’s parent company Kirin said: “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.
“Given this approval is unlikely to be forthcoming at this time, Lion and Mengniu Dairy have mutually agreed to cease the current sale process.
“We are disappointed with this outcome and will now consider pathways forward in relation to the Lion Dairy & Drinks business.”
Lion announced Dairy & Drinks was on the market in October 2018, with the proceeds to be used to finance the expansion of its craft beer and fine wine business internationally.
Coca-Cola Amatil showed initial interest – teaming up with Freedom Foods in bid last year – but walked away from the deal.
The sale of Lion Dairy & Drinks to Mengniu was approved by the Australian Competition and Consumer Commission earlier this year.
In a statement, Treasurer Josh Frydenberg said he had been advised the two companies had “mutually agreed to not proceed with the sale process”.
“This follows the communication of my preliminary view to Mengniu Dairy that the proposed acquisition would be contrary to the national interest,” he said.