S. Kidman & Co, Australia’s largest private land holding, would be bought over jointly by Australia’s richest woman Gina Rinehart and Chinese developer Shanghai CRED. The two entities have agreed on a deal to jointly make the purchase, the companies said on Sunday.
A new joint venture was created to buy Kidman in a bid to overcome government concerns about foreign interests buying the cattle empire. The new entity would allow Shanghai CRED to own 33 percent and Rinehart's Hancock Prospecting to own 67 percent of Australian Outback Beef.
In what was the group’s second rejection in six months, a proposal to the buying of Australian farm company by a consortium headed by Shanghai CRED and Hunan Dakang Pasture Farming, with a minority 20 percent Australian interest, was rejected by the Australian government in April. The deal was worth A$371 million ($281.3 million).
It was not in Australia’s national interests that Kidman's vast holdings - about the same size as South Korea, would be sold to Chinese buyers, Australian Treasurer Scott Morrison had said when the proposal was turned down. In order to cash in on global food demand and to keep tax revenues onshore, domestic ownership of agriculture is seen as crucial for Australia and its economy.
Kidman "is an important part of Australia's pioneering and entrepreneurial history", said Rinehart, who has close ties with ruling conservative lawmakers.
Kidman has pastoral leases covering 101,000 sq km (39,000 sq miles) and has an average beef herd carrying capacity of 185,000 cattle and it was founded more than 100 years ago.
To help assuage government concerns, the Anna Creek Station in South Australia, which makes up a quarter of its land holding, belonging to the company was already agreed to be sold to an Australian buyer. A concern that was noted by Morrison in rejecting the sale was the fact that Anna Creek is adjacent to the Woomera weapons testing site.
The separate sale of Anna Creek being completed is a deciding factor in the Hancock deal being passed. For the benefit of Australian Outback Beef, the proceeds from the sale of that and another station will be paid to Kidman and retained in the company.
"We welcome the significant investment proposed in addition to the purchase price and are confident that the Kidman business will be in good hands,' Kidman Chairman John Crosby said.
It was considering a fresh bid of its own with potential domestic investors, a source familiar with the Dakang bid had told Reuters in late August.
In the eventuality of Dakang pushing ahead, Rinehart would be a formidable opponent. According to Forbes, with assets worth $11.1 billion largely tied to iron ore assets, she is Australia's richest woman.
Sophia Mirabella, aofrmer lawmaker, was named by her to a senior role at Hancock Prospecting in August. She is also close to Deputy Prime Minister Barnaby Joyce.
(Source:www.bloomberg.com)
A new joint venture was created to buy Kidman in a bid to overcome government concerns about foreign interests buying the cattle empire. The new entity would allow Shanghai CRED to own 33 percent and Rinehart's Hancock Prospecting to own 67 percent of Australian Outback Beef.
In what was the group’s second rejection in six months, a proposal to the buying of Australian farm company by a consortium headed by Shanghai CRED and Hunan Dakang Pasture Farming, with a minority 20 percent Australian interest, was rejected by the Australian government in April. The deal was worth A$371 million ($281.3 million).
It was not in Australia’s national interests that Kidman's vast holdings - about the same size as South Korea, would be sold to Chinese buyers, Australian Treasurer Scott Morrison had said when the proposal was turned down. In order to cash in on global food demand and to keep tax revenues onshore, domestic ownership of agriculture is seen as crucial for Australia and its economy.
Kidman "is an important part of Australia's pioneering and entrepreneurial history", said Rinehart, who has close ties with ruling conservative lawmakers.
Kidman has pastoral leases covering 101,000 sq km (39,000 sq miles) and has an average beef herd carrying capacity of 185,000 cattle and it was founded more than 100 years ago.
To help assuage government concerns, the Anna Creek Station in South Australia, which makes up a quarter of its land holding, belonging to the company was already agreed to be sold to an Australian buyer. A concern that was noted by Morrison in rejecting the sale was the fact that Anna Creek is adjacent to the Woomera weapons testing site.
The separate sale of Anna Creek being completed is a deciding factor in the Hancock deal being passed. For the benefit of Australian Outback Beef, the proceeds from the sale of that and another station will be paid to Kidman and retained in the company.
"We welcome the significant investment proposed in addition to the purchase price and are confident that the Kidman business will be in good hands,' Kidman Chairman John Crosby said.
It was considering a fresh bid of its own with potential domestic investors, a source familiar with the Dakang bid had told Reuters in late August.
In the eventuality of Dakang pushing ahead, Rinehart would be a formidable opponent. According to Forbes, with assets worth $11.1 billion largely tied to iron ore assets, she is Australia's richest woman.
Sophia Mirabella, aofrmer lawmaker, was named by her to a senior role at Hancock Prospecting in August. She is also close to Deputy Prime Minister Barnaby Joyce.
(Source:www.bloomberg.com)