20th Nov 2015
Treasurer Scott Morrison says the government will block the sale of Australia’s largest cattle property portfolio, S. Kidman & Co, to foreign buyers.
Rumours of a potential buyer have been circulating for months, but the Kidman family and the deal’s facilitators, Ernst and Young in Adelaide have remained tight-lipped about the negotiations.
The ABC understands eight bidders were shortlisted, both Australian and international.
It’s been reported that a bidding war above $350 million has been playing out between China’s Genius Link Group and fellow Chinese company Shanghai Pengxin for the vast cattle enterprise.
But the Treasurer said the size and location of the properties means selling them to a foreign buyer would be “contrary to the national interest”, and the deal cannot go ahead.
“The parcel of land that we’re talking about is some 1.3 per cent of Australia’s landmass, some 2.6 per cent of the agricultural land in this country,” he said.
“The largest single parcel (Anna Creek Station) is next to the Woomera Protected Area.
“The Foreign Investment Review Board, as well as the other agencies that were consulted, have made recommendations in this respect which I’ve been pleased to accept.
“We welcome foreign investment, but as Treasurer I will always make sure that that investment is done in Australia’s national interest.”
Mr Morrison said the Government will consider any “future alternate proposal or set of proposals on its merits”.
Foreign investment in Australian agriculture
The family-owned S. Kidman & Co is Australia’s largest private landholder with properties covering 101,000 square kilometres in Western Australia, South Australia, the Northern Territory and Queensland.
Founded in 1899 by Sir Sidney Kidman, it is now one of the country’s largest beef producers with a herd of 185,000 cattle, supplying markets in Japan, the United States and South-East Asia.
One of the Kidman properties, Anna Creek Station, is also the largest single property holding in Australia and about half of the station’s pastoral lease is located within the Woomera Prohibited Area (WPA) in South Australia.
National defence concerns
He said the weapons testing range within the Woomera Protected Area made a unique and sensitive contribution to the country’s national defence and it was not unusual for governments to restrict access to sensitive areas on national security grounds.
Former Treasurer Wayne Swan previously blocked a Chinese state-owned firm from buying parts of Oz Minerals in 2009, citing proximity of one of the mining company’s projects to the Woomera Prohibited Area.
S. Kidman & Co’s managing director, Greg Campbell, said the company ensured all potential buyers completed due diligence to mitigate any issues surrounding national security.
“We certainly were well aware and made potential buyers for the business aware that they had to make applications to the Department of Defence in relation to the purchase of the part of Anna Creek that within the Woomera rocket range,” Mr Campbell said.
“So all the shortlisted buyers who made applications, whether domestic or offshore, were of the full understanding that the Department of Defence held the right to veto over who might be considered an owners for portions of land within the Woomera rocket range.”
Owners surprised by Government decision
Mr Campbell said he was surprised by the Government’s decision to block the sale.
“To be honest I didn’t think this would be the outcome.
“I knew there would be concerns, however cyber espionage around the world seems to operate quite successfully in its own right without the need to acquire an outback cattle property like Anna Creek.”
The company said it would now seek clarity around the Government’s concerns and the deal’s parameters.
Greg Campbell said while S. Kidman & Co was the largest cattle holding, by land size, it was not as big as other companies, which have foreign owners, by herd size.
“For example Consolidated Pastoral Company has a herd twice the size of Kidman and is 90 per cent foreign owned.
“The Australian Agricultural Company has a cattle herd that’s nearly three times the size of Kidman and is majority foreign owned,” Mr Campbell said.
“Kidman has become a specialist in arid zone pastoralism, and as a result we’ve got a big foot of country in the dry part of the interior and that’s a large area. It’s the large area that’s the problem.”
Mr Campbell said S. Kidman & Co would consider selling properties individually as a last option.
“That was always an option, it’s not the best return option to investors. The Kidman family have been patient investors in the Australian cattle industry for 116 years and what we find this morning is that they’re not at liberty to accept the best price for their business.
“I would think breaking up the business and selling off the cattle properties was the very last recourse.”
Mr Morrison said he communicated his decision to bidders and they had withdrawn their FIRB applications.
He said he would consider any future sale on its merits.
“Australia welcomes foreign investment where it is consistent with out national interests.
“Foreign investment has underpinned the development of our nation and we must continue to attract the strong inflows of foreign capital that our economy requires.
“Without it, Australia’s output, employment and standard of living would all be lower.”
A spokesman for Agriculture Minister Barnaby Joyce said he agreed with the decision, but had no further comment to make at this time.
More stories on the sale of iconic Australian pastoral properties
- Sold to Gina Rinehart; owner of iconic Fossil Downs station says ‘I can’t imagine life without it’
- Gina Rinehart out-bids ‘unprecedented’ interest in Fossil Downs Station: estate agent
- Chinese billionaire Xingfa Ma buys two cattle stations in northern Australia
- Moroak and Goondooloo cattle stations sold as the NT property market strengthens
- New Chinese owners of Elizabeth Downs in the NT see a future of cattle and crops
- Stapleton Station in the Northern Territory sold to Queensland cattleman