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Chinese group grabs Australia’s biggest beef pastures

Last updated on 20 April 2016

kidman1More than 100,000 square kilometres of pasture will pass into Chinese control if the Foreign Investment Review Board approves a deal announced April 19 whereby the vast Kidman and Co estates will be sold for $370 million to a joint venture between China’s Dakang and Australian Rural Capital.

Dakang will acquire 80% and Australian Rural Capital 20% of the company. A decision by the FIRB, which turned down an earlier bid by Shanghai Pengxin only last November, will not be made until after the July 2 general election.

Kidman and Co is Australia’s largest landholder, and one of the country’s biggest beef producers, owning 18 cattle stations in three states and the Northern Territory. With a herd of 185,000 cattle it produce grass-fed beef for export to Japan, the United States, and South East Asia. Its Anna Creek station is the world’s largest, and is excluded from the sale, no doubt because of its political sensitivity as it adjoins the Woomera rocket testing range.

kidman2Dakang Australia is 51% owned by Hunan Dakang (itself controlled by listed  Shanghai Pengxin and 49% owned by Shanghai Cred Real Estate Stock Co, controlled by Gui Goujie, who pushed millions of dollars recently into Port Adelaide football club.  Shanghai Pengxin is a multibillion dollar private conglomerate with over 40 subsidiaries.

ARC’s role in all this is opaque. It’s a fund management group with a small market capitalization, and its shares (ARC.AX)  entered a trading halt on Tuesday.

As the Financial Times Lex column commented, “ARC, with a listed value of $4m, looks more odd. With $350,000 cash on hand, ARC will need to convince investors to stump up $60m for the deal even as its primary asset — one-tenth of the listed cotton co-operative Nomai — is faring badly.”