Govt rejects Kidman's foreign bidders

19 Nov, 2015 06:36 AM
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TREASURER Scott Morrison has moved to prevent the sale of Australia's largest private land owner, S. Kidman and Co, to a foreign investor.

In a statement issued this morning, Mr Morrison said consistent with the recommendation from the Foreign Investment Review Board (FIRB), he has decided the acquisition by foreign investors of S. Kidman and Co would be contrary to the national interest and the government would not authorise the sale to proceed as currently proposed.

The 115-year-old cattle business holds approximately 1.3 per cent of Australia’s total land area, and 2.5 per cent of Australia’s agricultural land.

It comprises 10 cattle stations, including properties across regional South Australia, Western Australia, the Northern Territory and Queensland covering 101,411 square kilometres and managing a long-term average herd of 185,000 cattle.

"One of Kidman’s stations, Anna Creek, is also the largest single property holding in Australia. Importantly, around 50 per cent of the Anna Creek pastoral lease is located in the Woomera Prohibited Area (WPA) in South Australia," Mr Morrison said.

"The WPA weapons testing range makes a unique and sensitive contribution to Australia’s national defence and it is not unusual for governments to restrict access to sensitive areas on national security grounds.

"Given the size and significance of the total portfolio of Kidman properties along with the national security issues around access to the WPA, I have determined, after taking advice from FIRB, that it would be contrary to Australia’s national interest for a foreign person to acquire S. Kidman and Co. in its current form."

S. Kidman and Company management has acknowledged the federal government's concerns and intends to "seek clarity around those concerns and the deal parameters".

In a statement this morning the company said it wanted to ensure stakeholders could continue to work with the government in good faith to reach a satisfactory outcome.

The company said it had been advised the Treasurer had indicated an acquisition by foreign investors would be "contrary to the national interest" and would not be authorising the sale to proceed as currently proposed.

"The Foreign Investment Review Board (FIRB), through the Treasurer, cited concerns over the portion of Anna Creek Station within the occasional use 'green zone' of the Woomera Prohibited Area, and further concerns over the land area within the Kidman portfolio of remote arid zone properties," the statement said.

Federal Agriculture and Water Resources Minister Barnaby Joyce said he agrees with the decision announced today by Mr Morrison.

Speaking to media this morning, Mr Morrison was asked whether he would consider a partial sale of Kidman and Co, if it did not include the parcel of land connected to the Woomera Prohibited Area in South Australia.

“It’s up now to the vendor I think, to recalibrate how they would like to go forward,” he said.

“I said in my statement today I’m pleased to consider new applications around this.”

But Mr Morrison said the government was asked to consider a “holus-bolus package” and “that was not something that we believe was in the national interest”.

“National interest is the test here and a large range of measures are considered in any of these decisions; whether it’s national security issues or other issues that come to the fore in considering any particular application, that’s what we will do,” he said.

“It’s not FIRB’s job or the Australian government’s job to write people’s application; it’s our job to ensure that the national interest, when it comes to foreign investment, is maintained and preserved and advanced.”

Mr Morrison said the Australian government welcomes foreign investment to Australia.

“It’s been a key part of this country’s development ever since the first fleet arrived and it is important that we maintain an open view on foreign investment,” he said.

“But foreign investment in Australia always has to be on national interest terms.”

Under the Foreign Acquisitions and Takeovers Act 1975, all foreign investment applications are examined against Australia’s national interest.

This test includes a range of factors including: the impact of the proposal on the Australian economy and community; national security; consistency with other government policies including tax; competition; and the character of the investor.

In April, Kidman announced plans to sell its vast beef business.

The sale has attracted strong overseas interest, with up to 12 bidders including investors from China and elsewhere in Asia, Canada the UK and South America understood to have been on the shortlist.

More to come

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