‘‘For me to reject this proposal, I had to determine that the acquisition of GrainCorp by ADM is contrary to the national interest,’’ he said. I made a call in the national interest": Joe Hockey explains his decision to block the GrainCorp. Credit:Rob Homer ‘‘Based on all the available information, I have now made that decision.’’ GrainCorp shares nosedive Shares in GrainCorp lost a quarter of their value when trading resumed late this morning, down a heavy $2.94 at $8.26.

Prior to the rejection of the ADM bid by the Federal Treasurer, GrainCorp last traded at $11.20. GrainCorp's influence in Australia. Before the ADM bid was lodged in late October last year, GrainCorp was trading at around $8.70 a share. ADM has a 20 per cent stake in GrainCorp and the Federal government has said it will allow the US grains group to raise its stake to 25 per cent. ADM sweetened bid

This comes after ADM enhanced its takeover offer of GrainCorp earlier this week, promising an extra $200 million investment in GrainCorp's grain storage and handling network. The rejection of ADM's bid has been welcomed by Nationals MPs, who had vigorously lobbied the Treasurer to oppose the takeover. ADM currently owns more than 19 per cent of GrainCorp. Mr Hockey said he would allow the US company to increase its share up to 24.9 per cent, to "encourage" it to demonstrate its commitment to the Australian grains industry. The Treasurer said that out of more than 130 foreign investment applications, the GrainCorp proposal was the only one he had rejected. He explained that the Foreign Investment Review Board was divided on the matter.

"They were split, and I made a call in the national interest," he said. 'Disappointed' ADM will keep stake The US grain company said it was disappointed with the government's decision, and that Canberra sought no undertakings from ADM before making its decision to reject the bid. But at the same time ADM signalled it will retain its 19.8 per cent stake in GrainCorp, but that it will work with the GrainCorp board to maximise the value of its investment in the company. "We will work with [GrainCorp] to maximise returns on our investment and create value for both companies," ADM said in a statement.

Nationals rejoice

Prime Minister Tony Abbott praised Mr Hockey's actions over GrainCorp. "The Treasurer has been the guardian of our national interest today, as always," he told reporters in Adelaide. Mr Abbott stressed that Australia was "open for business," arguing that foreign investment had to accord with national interest. Deputy Prime Minister and Nationals Leader Warren Truss welcomed Mr Hockey's decision, noting that not all foreign takeovers were in the national interest.

“The Australian grain industry must now get on with building a strong future for itself and growing its export markets across the globe,” he said in a statement. “I welcome the fact that Australia will continue to have a major locally-owned company dedicated to furthering the interests of the Australian industry.” Agriculture Minister Barnaby Joyce told Fairfax Radio it was a great decision that reflected the views of grain growers, peak industry bodies and Australian people in general. "Australian people want to make sure that in the next 50 years ... where the world will consume more food than it has in its history .... that Australia has the potential to not only be the place where we grow the food but we make a buck out of marketing the product as well," he said. Hockey 'failed first big test' However, shadow Treasurer Chris Bowen said that Mr Hockey's decision showed that "the greatest obstacle to foreign investment in Australia is the cabinet".

"This was the first big test for Mr Hockey and his claim that Australia is open for business – and he has failed," Mr Bowen said. "The pre and post-election bravado about free markets and Australia being open for business has given way to the reality of an openly divided and dysfunctional government." Earlier this month, Mr Hockey had declared he would not be "bullied" over the GrainCorp decision, in comments that were interpreted as a push back against Nationals opposition to proposed the takeover. When asked this morning about who he was talking about, the Treasurer said the comment wasn't "particularly directed" at parliamentary colleagues. Spotlight on other foreign bids The rejection of the ADM bid for GrainCorp now puts the spotlight on two other foreign takeovers before the Foreign Investment Review Board, both from China.

One is the bid by the parent company of Yancoal to buy out minority investor interests. Loading The other is the bid by the Chinese government arm State Grid to acquire a large part of the Singapore Power equity held in its Australian electricity and gas businesses. The deadline for concluding this transaction was recently extended to December 31.