(Yicai Global) Aug. 20 -- China Mengniu Dairy’s planned purchase of Australia’s Lion Dairy & Drinks is still on the cards, the company told Yicai Global today, following a report that the Australian government intends to block the AUD600 million (USD431 million) deal.

Australia will not approve Mengniu’s offer to buy Lion Dairy from Japan’s Kirin Holdings since the country’s Treasurer Josh Frydenberg opposes the Foreign Investment Review Board's advice to give the go-ahead to the acquisition, the Australian Financial Review reported earlier today.

Australia rejigged its foreign investment law in June to confer on the finance minister the power to alter or set conditions on deals or compel a divestment after the FIRB has given its approval.

Mengniu made the cash offer for Melbourne-based Lion Dairy in November. The Inner Mongolia-based company is looking to step up its expansion in the Asia-Pacific region.

Editor: Ben Armour