Economy

Hockey warns of economic impact of US government shutdown; Saputo to take over Warrnambool Cheese and Butter with $390 million bid: Midday Roundup

Yolanda Redrup /

Federal Treasurer Joe Hockey has warned of potential consequences of the United States government shutdown if the saga drags on, in his first public comment since the shutdown.

Hockey told The Australian Financial Review the shutdown isn’t having an impact at the moment, but unless the budget is resolved, it will.

“You can’t have the biggest economy in the world with its public service sector in shutdown mode without having some impact,” he said as quoted by The Australian Financial Review.

“At this stage and in the foreseeable future, it’s not having an impact.”

Hockey will meet the heads of the US Federal Reserve, IMF and the World Bank tomorrow.

Saputo to take over Warrnambool Cheese and Butter with $390 million bid

The Warrnambool Cheese and Butter factory, Australia’s oldest listed milk processor, is set to be taken over by a Canadian dairy company for $390 million.

Saputo has offered $7 cash per share for WCB and the factory’s board has entered into a bid implementation deed.

The new deal comes after last month WCB pushed shareholders to reject a $319 million bid from Bega Cheese.

WCB chief executive David Lord said in a statement the offer “underscores the strategic value of WCB’s assets and vindicates the Board’s decision to reject Bega’s inadequate, highly conditional offer”.

Shares lower on weak Wall Street leads

The Australian share market has opened lower this morning as Wall Street investors remain subdued regarding the government shutdown, which remains ongoing – the market was rattled by a warning from the Treasury the country could default on its debt if a deal isn’t reached.

The benchmark S&P/ASX200 index was down 18 points or 0.4% to 5,142.9 at 11.40 AEST, while in the United States the Dow Jones Industrial Average fell 136 points or 0.9% to 14,963.2.

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