Agribusiness and beef industry leaders have backed the $365 million joint bid for the Kidman cattle empire, featuring Australian mining magnate Gina Rinehart.
The offer was announced on Sunday, with Mrs Rinehart’s Hancock Prospecting and Chinese company Shanghai CRED forming a joint venture company called Australian Outback Beef in their pursuit of the country’s largest private landholding.
The offer will hinge on the sale completion of SA station Anna Creek, which the SA-owned Williams Cattle Company has agreed to buy, and must earn Chinese government approvals and the all-clear from the federal government’s Foreign Investment Review Board.
Hancock Prospecting will have a 67 per cent stake in the company if successful, leaving Shanghai CRED with 33pc – less than the existing 33.9pc foreign-owned stake in S Kidman & Co.
S Kidman & Co is one of Australia’s largest beef producers, with a cattle carrying capacity of 185,000 and pastoral leases covering 10 million hectares of land across SA, WA, NT, and Qld.
Agribusiness Australia chief executive officer Tim Burrow endorsed the Rinehart bid, saying he expects the offer to pass Australia’s foreign investment protocols.
“You’d think it would pass with a controlling influence from an Australian-based organisation,” he said.
“I think it’d be fantastic if we could have another big Australian – a bit like BHP is to the mining industry – in the agribusiness sector.”
Earlier this year, Treasurer Scott Morrison knocked back a $371m joint bid from Chinese-listed Dakang Australia Holdings (80pc stake) and Australian partner Australian Rural Capital (20pc stake) on national interest grounds.
He had previously rejected a bid by Chinese company Pengxin Group.
The FIRB reviews foreign investment proposals against the national interest on a case-by-case basis, preferring that method to implementing hard and fast rules.
Mr Burrow said agribusiness needed investment like this, in what was a “boom time” for the sector.
“The agribusiness sector needs significant investment – a lot more than we’ve got at the moment – to capture the opportunities that are presented to us at this once-in-a-lifetime time of opportunity,” he said.
CBRE Agribusiness director Phil Schell harboured a similar view to Mr Burrow, saying he hoped the Rinehart bid would earn approval.
“It’s been sitting there for two years and we want to see this deal closed,” he said.
Mr Schell expected no major changes to the beef industry or agribusiness landscape if the sale went ahead.
“It’s an export commodity and as far as I think the operation will be concerned, it will be business as usual,” he said.