Australia blocked the sale of the nation’s largest private landowner to an overseas buyer, saying the location of one of the company’s 10 cattle ranches in a weapons testing area could compromise national security.
S. Kidman & Co.’s properties, which were listed for sale in April, attracted bids from China’s Shanghai Pengxin Group and Hong Kong-based investment firm Genius Link Asset Management, according to a person with knowledge of the matter, who asked not to be identified as the information is private. Pengxin had offered about A$350 million (USD250 million) for the string of ranches, the Australian Financial Review reported this month, citing unidentified people.
Treasurer Scott Morrison said in a statement that half of Kidman’s Anna Creek station, the nation’s largest single property holding, sits within the Woomera Prohibited Area – a remote stretch of the outback that’s been used to test nuclear bombs, launch satellites and track space missions. Selling Kidman in its current form to a foreigner would be “contrary to Australia’s national interest,” Morrison said in the statement.
Australia’s government has increased scrutiny of foreign acquisitions of agricultural land and earlier this month passed legislation to set up a register of overseas holdings of farm properties. Kidman’s ranches span 101,000 square kilometers, or about 1.3 percent of the nation’s total land area, and carry about 185,000 cattle.
The Woomera range “makes a unique and sensitive contribution to Australia’s national defense and it is not unusual for governments to restrict access to sensitive areas on national security grounds,” Morrison said.
All bidders have withdrawn their applications to the Foreign Investment Review Board to buy Kidman, Morrison said without identifying them, and it was “now a matter for the vendor to consider how they wish to proceed.”
A person who answered the phone at Pengxin’s Shanghai office wouldn’t transfer calls to the company’s public relations department, and Pengxin didn’t immediately respond to an e-mail sent to a general inquiry address. A spokesman for Genius Link didn’t immediately respond to an e-mail and phone call seeking comment.
Kidman said in a statement it would seek clarity on the government’s concerns and the “deal parameters” so that “stakeholders can continue to work with the government in good faith to reach a satisfactory outcome.” Established in 1899 by Sidney Kidman, Australia’s “Cattle King,” the family-owned enterprise produces grass-fed beef for export to Japan, the U.S. and Southeast Asia.
In 2009, the government blocked China Minmetals Group’s bid for OZ Minerals Ltd. given the proximity of the Prominent Hill copper and gold mine to Woomera. It later cleared the sale of most of the rest of OZ Mineral’s assets to Minmetals. Edward Johnson, Bloomberg
pm defends port leasing to chinese company
Australia’s prime minister yesterday defended the leasing of a strategically important port to a Chinese company, saying the military could seize control in a crisis. The Northern Territory government has struck a deal to lease Darwin city’s port to the Chinese government-linked Landbridge Group for 99 years. The deal has attracted criticism because Darwin in an important military base on the northern Australian coast, where up to 2,500 U.S. Marines train as part of increasing U.S. defense resources in the Asia-Pacific region. President Barack Obama raised the deal in discussions with Turnbull at an Asia-Pacific Economic Cooperation summit in the Philippines. Turnbull said on Thursday that Australian defense officials were not concerned by the deal and had not lost control over the port. “The Department of Defense or this federal government can step in and take control of infrastructure like this in circumstances where it’s deemed necessary for purposes of defense,” Turnbull told reporters in Manila.
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