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Australia Approves Sale of S. Kidman to Gina Rinehart, Shanghai CRED

December 11, 2016

The day is finally here; Australia’s Treasurer Scott Morrison has granted approval for the sale of the S. Kidman cattle empire to Australian Outback Beef (AOB) – a joint venture between mining magnate, Gina Rinehart and China’s Shangjai CRED for A$386.5 million.

After almost two years more than 600 interested parties have contacted the sale manager, Ernst & Young, about a possible deal for the country’s largest land holding. Established in 1899 by Sidney Kidman, the company has grown to run 185,000 head of cattle on 101,000 square kilometers of land, or 1.3 percent of the land area of the country, stretching across Queensland, South Australia, Western Australia, and the Northern Territory. Equal in size to the country of South Korea, S. Kidman is the largest private agricultural landholder in Australia including 19 properties, ten cattle stations, a bull breeding stud farm and a feedlot.

The iconic nature and national significance of S. Kidman has drawn out its sale process after repeated rejections of offers from Chinese bidders or partnerships with majority Chinese partners amid political and populist pushback against foreign control of Australia’s agricultural holdings.

Under the structure of the AOB joint venture, Gina Rinehart’s Hancock Prospecting will own 67 percent of S. Kidman, with Shanghai CRED owning the remaining 33 percent.

The bid through AOB is a repeat bid from Shanghai CRED who in April of this year headed a consortium with Hunan Dakang Pasture Farming and a 20 percent Australian interest that made a bid of A$371 million (US$281.3 million) for the company. The bid was subsequently rejected by Australian Treasurer, Scott Morrison, who claimed the deal would not be in the country’s best interest.

Under the structure of the deal, Anna Creek, the largest station in the S. Kidman holding, and its outstation, the Peake will be acquired by the Williams family – owners of abutting properties. Hancock Prospecting will remain as majority owner and will control the S. Kidman Board, which will remain an Australian incorporated company headquartered in South Australia according to an announcement released by the office of Scott Morrison.

Australian Outback Beef has pledged to increase the S. Kidman herd size by 20,000 head over the next 18 months and will invest up to $19 million in capital improvements that will enhance the operation’s efficiency and lift carrying capacity. The venture also expects to create 35 new jobs by June 2018.

Following the approval, Gina Rinehart released a video during which ABC reports she said, “Now to become the third largest producer of cattle in Australia I think it’s just great. I see an ongoing need for meat particularly in the Asian region and most of our cattle from Australia, three quarters, we export. And of course the value of the land over decades is going to keep increasing and increasing.”

Lynda Kiernan

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