A Chinese-led group has agreed to buy Australia’s most iconic cattle company in a deal valued at more than $300 million after partnering with local investors.
The venture, headed by a company controlled by Shanghai Pengxin Group, will purchase 80 per cent of S. Kidman & Co, according to a statement today to the Shenzhen Stock Exchange. Australian Rural Capital will take a 20 per cent stake.
The deal needs approval from the board and shareholders of Shenzhen-listed Hunan Dakang Pasture Farming Co, controlled by Shanghai Pengxin.
There was no immediate comment from the Australian government, whose approval is also required for the deal.
S.Kidman & Co, which has cattle station holdings covering 11 million hectares, was placed on the market for sale in April last year with EY. The company was expected to sell for more than $325 million.
Last week, Australian-owned Archipelago Beef Trust confirmed it had purchased two cattle stations for more than $60 million from Indonesia’s biggest importer of live cattle, Japfa, in a deal that goes against the trend of overseas buyers snapping up Australia’s major rural landholdings.
The S. Kidman & Co purchase was expected to be a major talking point during Prime Minister Malcolm Turnbull’s visit to China last week.
In January, outspoken entrepreneur and aviator Dick Smith called the imminent sale of S.Kidman & Co an act of madness, saying that with the value of agricultural land rising, Australian super funds should be competing to buy the cattle stations.
Kidman, established in 1899 by Sidney Kidman who became known as Australia’s Cattle King, runs about 185,000 cattle at ranches spanning 101,000 square kilometres or about 1.3 per cent of Australia’s total land area.
The family-owned enterprise produces grass-fed beef for export to Japan, the US and South-East Asia.
Australia’s Foreign Investment Review Board in November blocked the sale of Kidman to an overseas buyer, saying the proximity of its Anna Creek ranch to a weapons testing range could compromise national security.
Kidman subsequently carved that ranch from the sale to ease such concerns.
Hunan Dakang holds 51 per cent of the venture, which will pay as much as $300 million for its 80 per cent stake in Kidman, according to the statement.
Last week, major cattle companies reported significant uplift in values with The North Australian Pastoral Company declaring a 13 per cent increase in land values and the Australian Agricultural Company reporting an $80 million rise, or 15.8 per cent increase, in the value of its 18 cattle stations.
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