SYDNEY, Aus. (Reuters) — Australia has blocked the sale of the country’s largest landowner, private farming group S. Kidman and Co., to foreign investors, saying an agricultural area the size of South Korea should remain in Australian hands.
Ownership of farmland is a sensitive political issue in Australia amid concerns that foreign buyers are snapping up properties to cash in on a boom in food demand from Asia.
Kidman’s 10 cattle stations cover more than 25 million acres of land spread across Western Australia, the Northern Territory, Queensland and South Australia.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
The privately owned company said in April it was looking to sell its cattle operations, which hold 185,000 cattle, to raise cash for other businesses and investments.
Local media reported that two Chinese companies, Genius Link Asset and Shanghai Pengxin, were leading the race to secure Kidman in a deal expected to be worth $334 million.
The group’s largest station, Anna Creek, is partly located on the Woomera Prohibited Area, a weapons testing range in South Australia.
Australian treasurer Scott Morrison said a sale to foreign investors in the current form would be contrary to the national interest given the “size and significance” of the Kidman properties. He also cited national security issues.
Greg Campbell, Kidman’s chief executive officer, said the company was surprised by the government’s decision.
“We need to go back to discussions with the Commonwealth and find out some more specifics to see whether it is possible for our bidders to find ways around those concerns,” Campbell said.
“Some of the solutions may be to take some Australian content into their bids, basically to take in Australian partners,” he said.
“It may possible to sub-divide the Woomera rocket range out and sell it separately, or it may be possible to limit the type of activities that go on with the Anna Creek facility.”
Morrison said all bidders had now withdrawn their Foreign Investment Review Board applications, and it was up to the vendor to decide how to proceed with the sale of the business or parts of it.
Australia, which is concerned it is losing control of its food security, in February slashed the amount beyond which land purchases would require regulatory approval and said a registry of foreign land ownership would be developed.
Foreign purchases of agricultural land of more than $14 million are now subject to regulatory approval from the investment review board.
Australia rejected a $2.7 billion takeover of grain handler GrainCorp Ltd. by U.S. giant Archer Daniels Midland Co. in 2013.
