Australian Treasurer Scott Morrison on Friday [29 April 2016] blocked the sale of S. Kidman and Co. Limited, the country’s largest private land owner, to Chinese investor, saying the deal is “contrary to the national interest”. Dakang Australia Holdings Pty Ltd (Dakang), a consortium controlled by Shanghai Pengxin, has been the front-runner of the bidders with an offer of 370.1 million AU dollars (281 million U.S. dollars), which is significantly higher than earlier valuations…Full Article: China.org.cn Apr 2016

Key Point

  • In the wake of the failed November 2015 deal, Kidman sold its South Australia properties of Peake and Anna Creek in order to allay FIRB national security concerns. Anna Creek was sold to Williams Cattle for approximately AU 16 million (~US$12 million).

ChinaAg Comment

  • 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.
  • In March 2016, Australian Rural Capital has announced it was partnering with Shanghai Pengxin Group to purchase S Kidman & Co Ltd (Kidman).
  • 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.
  • Founded in 1997 and headquartered in Huaihua, Hunan Province, Hunan Dakang Pasture Farming (SHE:002505) is a producer of meat (pork, beef, sheep) and dairy products.
  • Founded in 1988 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.
  • Founded in 1899 and headquartered in North Adelaide, South Australia, S Kidman & Co Ltd (Kidman) manages 101,000 sq. km. of land (~1.3 of Australia’s total area) and hosts 185,000 heads of cattle.

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