Eastward Ho! China Poised to Buy 1 Percent of Australia

[TaiShang]

Eastward Ho! China Poised to Buy 1 Percent of Australia

Asia & Pacific
17:50 21.04.2016(updated 17:53 21.04.2016) Get short URL
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A Chinese-led consortium has agreed to buy Australia’s most iconic cattle company S. Kidman and Co. worth $289 million and covering for one percent of Australia’s landmass, the Australian Broadcasting Corporation wrote citing a source in the company.

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The consortium, made up of Dakang Australia, whose company is Hunan Dakang Pasture Farming, a private Chinese company with no government ownership, is set to snap up 80 percent of the land, with Australian Rural Capital (ARC) taking the remaining 20 percent.


In November, Australia's Foreign Investment Review Board blocked the sale of Kidman to an overseas buyer, saying the proximity of its Anna Creek station to a weapons testing range could compromise national security.

After the deal was rejected in November, a Kidman representative said the company had ensured all potential buyers had completed due diligence in an attempt to mitigate any issues surrounding national security.

Kidman was established in 1899 by Sidney Kidman who became known as Australia's "cattle king."

They raise about 185,000 cattle at stations spanning 101,000 square kilometers, or about 1.3 percent of Australia's total land area – bigger than Ireland.

Security concerns have often been brought up to block the sale of Australian assets to Chinese-led consortiums, Chen Fengying, a leading economist at China’s Institute of Modern International Relations, said in an interview with Sputnik.

“The hurdles erected in the way of Chinese companies’ ongoing effort to explore foreign markets reflect deep-seated Western fears of the so-called 'Chinese threat.' They see Chinese businesses as a threat to their comfortable existence,” Chen Fengying said.

She added that each time the Chinese buy real estate abroad their local partners warn that this would drive prices up. When China wants to acquire any assets abroad its foreign partners insist that these assets cannot be sold to a foreign buyer.

“They also fear that China would snap up some of their commodities and trademarks. In a word, they view us as a threat, even though the global acquisition and takeover of enterprises is an inevitable element of the ongoing process of global economic restructuring,” she said.

The process of economic globalization will continue and European and American energy and oil companies are likewise engaged in this process which helps make them more competitive.

“Wary as some countries are of China’s participation in this process of mergers and takeovers, this is an objective economic development that simply can’t be turned back,” Dr. Chen said.



Read more: http://sputniknews.com/asia/20160421/1038393625/australia-china-acquisition.html#ixzz46YnZCZiY

 

[My-Analogous]

China must asked these culprit minded people that when China's attack these in past let say 2000 years?

 

[TaiShang]

China must asked these culprit minded people that when China's attack these in past let say 2000 years?

Those people simply want to maintain the old order of things; lack of power to do that coercively, they resort to such soft tactics of mud-slinging and fearmongering.

Nevertheless, as @ahojunk says, the sheer power of money can even buy loyalties and reshape opinions.

 

[Chinese-Dragon]

We have bought large tracts of land in Europe as well (Ireland) and Central Asia (Kazakhstan).

Land is important, it's tangible in a way that "financial assets" are not.

 

[jhungary]

First of all, Land in Australia belong to the commonwealth. When China or anyone (like me) buy a piece of land in Australia, we buy the "Exclusive Right" to use the land. At local council and state government approval, Federal Government can retrieve any part of Australia and either relocate its current occupant, or put in a financial compensation for. So, no single party, foreign or domestic, can own Australian Land.

Second of all, the FIRB do not just consider a deal by its physical judgement (ie physical threat) but also it's potential threat to local community, if a deal is likely force out Australian local competition, then that particular deal would most likely won't gone thru. Alternatively, Australian company are require to consider local tender first, before overseas tender can be considered, and if a proper local tender exist for local company, the overseas deal would also be rejected by FIRB.

And finally, unlike someone said here, money cannot buy everything. That's the reason why FIRB existed in the first place.

 

[C130]

makes sense...each lb. of beef requires 1,807 gallons of water, and I don't think China has that kinda water to spare.

 

[TaiShang]

Chinese company buys Australian cattle giant
By Liang Jun April 20, 2016

(File Photo)

Hunan Dakang Pasture Farming, a subsidiary of Shanghai Pengxin Group, announced on Tuesday that it has finished a "tender offer implementation agreement" with Australia's most iconic cattle company, S. Kidman & Co. The agreement is for Hunan Dakang to purchase an 80 percent share of S. Kidman & Co. for AUD 300 million, or 1.5 billion yuan.

Of the 80 percent, Hunan Dakang will hold a 51 percent stake and Shanghai Credential Estate Stock will have 49 percent.

The remaining 20 percent share of the company was purchased by Australian Rural Capital.

Kidman boasts the world's largest ranch, spreading across five states and housing 185,000 cattle at stations spanning more than 100,000 square kilometers. The total area of the ranch accounts for about 1.3 percent of Australia's total land area, roughly equal to China's Zhejiang province.

The announcement of the new agreement also states that Kidman’s main businesses include the breeding and sale of cattle, along with the production and sale of beef.

 

[anon45]

China Stopped From Buying 1% Of Australia

So close, but yet so far. A private Chinese company was temporarily banned from its deal with S. Kidman & Company, Australia’s largest land owner. The government is reviewing the deal, citing “national interests”. (Stock photo provided by Pexels)

China was “this close” to owning one-percent of the Australian land mass. Until a Federal Treasury Department official stepped in and said hold your horses to a cattle ranch deal worth over $370 million.

Treasury’s Scott Morrison, the man in charge of approving foreign land deals, postponed the government’s decision on whether China’s Dakang Australia Holdings can buy 80% of S. Kidman & Company, Australia’s largest private land owner. The company agreed to sell the majority stake to Dakang on Tuesday, but the government put the breaks on the $370 million deal shortly after.

Dakang Australia’s parent company is Hunan Dakang Pasture Farming, a private Chinese company with no government ownership traded on the Shenzhen stock exchange. Its biggest shareholder is listed as Shanghai Pengxin Group, another private investor conglomerate that has its hands in many businesses, namely real estate. Pengxin owns 55% of Hunan and once made a bid for the Kidman property.


The deal would give the Chinese company 9 cattle stations, a bull breeding stud farm and a feedlot. Australian media reported that the land is equivalent to one percent of Australia’s landmass, or roughly 30,0000 square miles cross South Australia, Western Australia, Northern Territory and Queensland.

What’s behind China’s agribusiness investment binge these days?

The best explanation is the fact that the industry has an unsavory reputation back home. Most if it caused by health hazards from lackluster or non-existent sanitary guidelines. The tainted milk scandal of 2008 effectively turned Chinese off to home-grown dairy. Many Chinese tourists will buy dairy products in Japan and Australia while on vacation. Similar incidents have occurred with hog farming, where pigs from farms were found washed up dead in the polluted rivers they drink from.


Acquisitions of Western agribusiness help companies like Hunan Dakang showcase its international standards and credentials while at the same time learning best practices from foreign firms.

Kidman Chairman John Crosby said on Tuesday that the sale would “secure the long-term future of Kidman,” adding that Dakang would be “good custodians” of the outback property.

The deal also includes a 20% share of Australian Rural Capital, a fund firm investing in agricultural land and related infrastructure.

On April 20, Morrison said the government would delay the transaction for 90 days, thus putting it off until after the double-dissolution election on July 2. The election is designed to reboot both houses of a gridlocked congress.

According to a story in The Guardian, Morrison will investigate whether Australian companies were given the chance to bid, or had similar offers rejected. “I want to be absolutely confident when I finally consider this matter that Australians have had every opportunity to be participants in that process,” he said. “National interest considerations of proposed transactions should not and will not be rushed on an important matter such as this.”

A similar matter occurred in the U.S. when a Chinese investment consortium led by insurer Anbang bid $13 billion for Starwood Hotels HOT +0.77% & Resorts. The deal ultimately went to Marriott instead when the upped the ante by $600 million. Anbang bought the iconic Waldorf Astoria Hotel in New York for $1.9 billion in 2014.

Chinese companies have been on a acquisition spree worldwide. Much of the move is thanks to the opening of the capital account, allowing for Chinese investors to buy overseas assets such as real estate and securities. The purchases serve as a testimony to just how much money Chinese investors and individual companies have earned in their local market over the last decade. They are now willing to spend a lot of it overseas instead of at home where most of their money is made and remains.

http://www.forbes.com/sites/kenrapo...pped-from-buying-1-of-australia/#791339525d01

 

[ahojunk]

IMHO, politics is at play here, delaying the decision by 90 days.

Australia has a general election coming up on July 2.

After the election, I am pretty confident that whoever (Liberal Coalition or Labour) wins government will approve this deal.

 

[jhungary]

IMHO, politics is at play here, delaying the decision by 90 days.

Australia has a general election coming up on July 2.

After the election, I am pretty confident that whoever (Liberal Coalition or Labour) wins government will approve this deal.

Well, Billy Shorten from Labor have been publicly oppose to the deal, and in general, a Labor government would stop almost all Foreign Land/Company buy so they can appeased to the voter, so if Labor Government went in, the deal is most likely scraped