Australian investment company Australian Rural Capital has announced to the stock exchange it is partnering with Shanghai Pengxin Group to buy S. Kidman & Co, Australia’s largest private landholder with properties covering 101,000 square kilometers in Western Australia, South Australia, the Northern Territory and Queensland. Shanghai Pengxin was forced to rework its initial bid-thought to be around $370 million-after Federal Treasurer Scott Morrison said last year it was not in the national interest for him to approve a sale to a sole foreign buyer. As well as pairing up with ARC, it is understood Shanghai Pengxin has removed Anna Creek Station from its purchase offer…Full Article: China Daily Mar 2016

Key Point

  • Australian Rural Capital (ARC), which is managed by James Jackson (livestock manager in northern New South Wales) and Stephen Chapman (chairman of Baron Partners), has been primarily focused on cotton but hopes to expand into beef, sugar, wine, and nuts.

ChinaAg Comments

  • By 2050, according to the Business Council of Australia, the country’s agriculture sector would need to acquire up to AUD 1 trillion (~US$723 billion) in foreign investments.
  • In November 2015, the Australian government vetoed the sale of S. Kidman and Co., a major cattle operator, on national security grounds. According to Australia’s Treasurer, half of Kidman’s Anna Creek pastoral lease lies within the country’s Woomera Prohibited Area (WPA) testing range in South Australia.
  • In August 2015, representative of S Kidman & Co Ltd stated that final bids to purchase the company will occur in late October 2015 at the earliest.
  • In March 2015, Australia passed a law requiring Foreign Investment Review Board (FIRB) approval for the sale of agricultural land valued over AUD 15 million (~US$10.8 million).
  • In late 2012, Shanghai Pengxin won a legal battle to purchase 16 North Island dairy (CraFarms) farms. The farms (8,000 ha and 16,000 cows) were purchased by Shanghai Pengxin’s subsidiary Pengxin New Zealand Farm Group.
  • Founded in 1997 and headquartered in Shanghai, Shanghai Pengxin owned more than 40 subsidiary companies as of 2015.  The conglomerate has businesses in real estate, mining, agriculture, and private equity.

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