Treasurer Scott Morrison has blocked the sale of Australia’s largest cattle business, S. Kidman and Co. for a second time, on national interest grounds.
The 116-year-old business, which covers 100,000 square kilometres of the Australian outback, has been on the market for a year and the company was in talks with Chinese-based Dakang Australia Holdings and ASX-listed Australian Rural Capital Ltd for a sale worth more than $370 million.
Scott Morrison blocked the sale to foreign buyers last November saying it would be “contrary to the national interest”.
Today, he made the same call saying Dakang’s majority interest in the business was also against the national interest.
“Given the size and significance of the Kidman portfolio I am concerned that the acquisition of an 80% interest in S. Kidman & Co Limited by Dakang Australia Holdings Pty Ltd (Dakang) may be contrary to the national interest,” Morrison said.
“I have today made my concerns known to the applicant and provided them with a natural justice period in which they may respond and consider how they wish to proceed. The applicant shall have until next Tuesday 3 May 2016 to respond.”
The treasurer added that he’d formed the view that the business, Australia’s largest private land holding, covering 1.3% of Australia’s total land area, and 2.5% of the nation’s agricultural land, may simply be too big for a local buyer.
“I have concerns that the form in which the Kidman portfolio has been offered as a single aggregated asset, has rendered it difficult for Australian bidders to be able to make a competitive bid. The size of the asset makes it difficult for any single Australian group to acquire the entire operation,” Morrison said.
He added that the issues he raised on 19 November, 2015, when he first blocked the sale to foreign buyers, remained.
“I am not yet satisfied these concerns have been addressed by the revised proposal that has been submitted to me,” he said.
The treasurer revealed that last week that he commissioned a review of the Kidman sale by former ACCC boss, Professor Graeme Samuel.
Morrison said that while it contains commercial-in-confidence details that preclude its release, it found there was significant domestic interest in the business.
“The size and significance of the portfolio, combined with the impact the decision may have on broader Australian support for foreign investment in Australian agriculture, must also be taken into account in this case,” he said.
“The Turnbull Government welcomes foreign investment where it is consistent with our national interests. However, we must always ensure it is on our own terms. There are not too many jurisdictions anywhere in the world where foreign acquisition of large holdings would be permitted.”
The Kidman portfolio includes Anna Creek Station, the largest cattle property in the world. At just under 24,000 square km – 2.4 million hectares – it is bigger than Israel, about the same size as Rwanda and seven times larger than the biggest ranch in Texas. It almost closed down in 2008 following prolonged drought, but in good times can hold up to 14,000 head of cattle.
Even if the Anna Creek and The Peake properties were excised from the sale, Kidman will still be Australia’s largest private land owner at 1% of nation’s total land mass.
Kidman & Co. has more than 200,000 stock producing grass-fed beef for export to Japan, the USA and South East Asia. It was founded by Sir Sidney Kidman in 1899.
Here’s a map of the Kidman properties across Australia, with the arrow pointing to Anna Creek Station.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.