Yahoo Finance A Chinese company has agreed to buy 1% of Australia
A Chinese-led consortium has agreed to buy 1% of Australia’s land—an area bigger than Ireland.
The deal to buy S. Kidman and Co—Australia’s largest farming estate—is worth A$371 million (US$289 million), but has yet to be approved by Australian and Chinese regulatory authorities. The consortium is made up of Dakang Australia, which is set to acquire 80% of the land, with Australian Rural Capital (ARC) taking the remaining 20%.
S.Kidman & Co, which has pastoral leases covering almost 11 million hectares, was up for sale last year, and set off a bidding war including two Chinese companies, but the Australian government blocked any deal. Australian treasurer Scott Morrison said that selling the land to a foreign entity would be “contrary to the national interest.”
The government’s main problem with the deal was that the property included the Anna Creek farm, where a military weapons testing range, the Woomera Prohibited Area, is located. The concern was that selling this portion to a foreign company could create a security risk.
The Anna Creek farm was removed from the most recent sale agreement. In December, S.Kidman & Co announced it would sell it to existing shareholders or other Australian buyers.
The estate in the current sale agreement includes 10 cattle stations with a total long-term average herd of 185,000 cattle. The property stretches across South Australia, Western Australia, the Northern Territory, and Queensland. The family that owned the company became one of Australia’s largest beef producers.
Dakang Australia’s parent company is Hunan Dakang Pasture Farming, a private Chinese company that is primarily involved in the breeding and distribution of pigs. It also has a large stake in New Zealand’s dairy industry. Meat consumption has quadrupled in China since 1971. The country has, as a result, become more dependent on feedstock imports of soya bean and corn.
The treasury doesn’t have to make a decision on whether to allow the sale until after the elections. The deal follows a two-day visit to China earlier last week (April 14) by Australian prime minister Malcolm Turnbull and 1,000 or so business leaders, part of a push to establish more trade opportunities between nations. Turnbull even announced that Australian rules football—similar to Rugby and American football—will be coming to China (even though no one really cares about it).
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