Mining magnate Gina Rinehart’s joint venture with a Chinese company will buy S Kidman & Co, Australia’s biggest agricultural property, after the treasurer approved the sale.
On Friday Scott Morrison announced he had approved the bid from Australian Outback Beef, which is 67% owned by Rinehart’s Hancock Beef and 33% owned by Shanghai CRED.
The largest station in the Kidman group, Anna Creek in South Australia, and its outstation The Peake, will be bought by the Williams family, a local farming family with adjoining properties. The rest will be sold to the joint venture.
Morrison said the deal increased Australian ownership in the properties currently part of the Kidman group from 66.1% to 74.7%.
Rinehart said the purchase would put her company in the top three beef producers in Australia, with a combined herd size growing to about 300,000 head.
The company planned to invest in technology and infrastructure with the potential to create 100 jobs in regional communities.
“The treasurer’s approach to the sale of Kidman enabled a local Australian company to pay a fair market price and retain Kidman in Australian control,” she said.
The Australian-owned Hancock will control the board and day-to-day operation of the business, which will remain incorporated and headquartered in South Australia. Existing environmental and other commitments will be honoured.
“Consistent with the recommendation from the foreign investment review board (Firb), I have decided that the acquisition of Kidman as proposed would not be contrary to the national interest and will be permitted to proceed as proposed,” Morrison said.
The treasurer said the sale process had been “extensive and heavily scrutinised”, referring to two decisions blocking the sale to foreign investors on national security grounds first in November 2015 then to a Chinese-owned consortium in April.
Security concerns that influenced the earlier rejections had been mitigated by excising Anna Creek, the largest single property holding in Australia, from the sale. Part of Anna Creek is in the Woomera protected area in South Australia.
In October the joint venture knocked out a syndicate of Australian graziers by increasing its bid to $386.5m.
Greg Campbell, Kidman’s managing director, said staff and management were excited about entering into a “new and transformational phase” of the business.
“I know I speak not only for myself but for many Kidman employees when I say we are pleased that Hancock, a highly respected Australian company, leads the joint venture that has received key approvals to acquire Kidman,” he said in a statement.
“Mrs Gina Rinehart is a prominent Australian and we appreciate her desires to further invest and grow the business.”
The company also welcomed the commitment to keep the Kidman head office in Adelaide.
Kidman is one of Australia’s largest beef producers, with pastoral leases covering 101,000 sq km across South Australia, Western Australia, Northern Territory and Queensland.
There are 19 individual properties operated as 12 enterprises – 10 cattle stations, a bull breeding stud farm and a feedlot.
The divestment of Anna Creek and The Peake stations will reduce the land area bought by Outback Beef to 77,700 sq km.
The approval of the sale is likely to win support from One Nation which had welcomed the Hancock-Shanghai joint venture.
The One Nation leader, Pauline Hanson, told the ABC in October: “I would rather Australia have two-thirds in Kidman station, rather than the total ownership and control by the Chinese or any other foreign investor.
“Congratulations to Gina Rinehart for actually taking up and buying Kidman.”
But independent lower house MP Bob Katter expressed outrage on Friday, accusing the treasurer of selling out the country by approving the deal.
“Does anyone seriously think that Shanghai CRED, with its parent company having put in a bid for the whole lot, [are] going to settle for a third?”
Morrison said any future changes in ownership, including any increase in interest by Shanghai CRED, will require subsequent Firb and treasurer approval.
