Gina Rinehart launches $370m bid for Kidman cattle empire

Hancock will own 67 per cent of Kidman’s giant cattle portfolio and Chinese conglomerate Shanghai CRED 33 per cent under the formal agreement announced late Sunday following months of speculation.

Australia’s richest businesswoman Gina Rinehart is diversifying into agriculture. Photo: Joe Armao

The offer is conditional on Australian foreign investment approval, regulatory approvals from China and the sale of the Anna Creek station to other Australian grazing interests. If successful, that is expected to take about six weeks.

While foreign ownership of the Kidman landholdings, which make up around 1.3 per cent of Australia’s land mass, have become a political hot potato, the deal is also significant as it marks the biggest push so far by Australia’s richest businesswoman into agriculture. Hancock has spent around $200 million on cattle stations in Western Australia and the Northern Territory over the last two years as it diversifies away from its traditional mining operations.

“Kidman is an iconic cattle business established more than a century ago by Sir Sidney Kidman. It is an operation founded on hard work and perseverance by an outstanding Australian, and is an important part of Australia’s pioneering and entrepreneurial history,” Mrs Rinehart said.

Under the bid implementation agreement, Hancock and Shanghai CRED, which is owned by Chinese businessman Gui Guojie, will establish a joint venture company called Australian Outback Beef (AOB) to acquire 100 per cent of the shares in Kidman.

Kidman has agreed exclusivity arrangements with AOB, which means it must pay a break fee if it decides to accept another offer.

The Kidman offer is the first firm bid for Kidman by a majority Australian-owned consortium which is expected to help get the deal across the line. Ms Rinehart’s family also have long ties to the pastoral sector and she is close to Deputy Prime Minister Barnaby Joyce who had concerns about the original Chinese-led bid.

In May, a Chinese-led consortium called Dakang Holdings pulled its $370 million bid after the Treasurer Scott Morrison rejected the deal on national interest grounds.

The Hancock bid is worth $365 million, excluding the assets that will be sold as part of the deal.

S.Kidman & Co is one of the country’s largest beef producers with 185,000 cattle and pastoral leases covering 101,000 square kilometres.

The Anna Creek Station is to be sold separately because it is adjacent to the Woomera missile testing centre, one of the most strategically sensitive locations in Australia.

In 2009, the Federal government blocked the sale of Oz Minerals to Chinese firm Minmetals on the grounds that its Prominent Hill copper and gold mine, which is 150 kilometres away, was too close to Woomera.

The presence of Chinese investors could raise alarm bells. Treasurer Scott Morrison blocked the sale of Ausgrid, a NSW-government owned electricity network, to China State Grid Corporation on national security grounds.

The Federal government has recently changed the rules for FIRB approval to give security agencies more input into decisions and has promised to release a list of strategically significant firms.