Treasurer Scott Morrison today announced that the government has no objection to the proposed sale of the Kidman Pastoral business to Australia Outback Beef Ltd (AOB). This announcement puts the deal one step closer to completion.
AOB is a joint venture company headed and owned 67% by Hancock Prospecting Pty Ltd (Hancock) and 33% by Shanghai CRED Real Estate Stock Co Ltd (Shanghai CRED).
Hancock Chairman Gina Rinehart welcomed the Treasurer’s announcement, noting that the new ownership deal would reduce the amount of foreign ownership of the pastoral group – from its current approximately 34% down to 33%. Close to 99% of Kidman’s existing shareholders have already accepted the AOB offer.
When combined with its other existing operations, the acquisition will place Hancock in the top three beef producers in Australia, with a combined herd size growing to about 300,000
head. AOB looks forward to working with the Kidman senior management team and the
station managers to continue to invest in its beef business to improve both the production
quality and consistency and bring improvements to the properties.
Attributable Comments:
Hancock Group Chairman, Gina Rinehart: “Three quarters of this country’s beef production is exported, and export markets are critical for the industry’s future. We intend to provide additional investment in cattle and infrastructure, including technology improvements in our efforts to keep cost and quality competitive internationally. The combined Kidman and Hancock herd will reach 300,000 head, placing Hancock in the top three beef producers in Australia. This will also see additional volume going through local downstream processing
facilities to package Kidman branded beef products for export.”
“The Treasurer’s approach to the sale of Kidman enabled a local Australian company to pay
a fair market price and retain Kidman in Australian control.”
“We are excited about the future, and looking forward to getting down to work with the
Kidman managers, as soon as we receive PRC approvals, which are well progressed and
expected shortly, to explore and drive technology and other improvements.”
Kidman Group Chairman, John Crosby: “The Board, management, and staff of the company are very pleased that the Kidman head office and jobs will remain in Adelaide. Further investment into Kidman by the Hancock controlled joint venture has the potential to create another 100 jobs in regional communities over the next few years. Growth will also give a boost to suppliers and contractors to the beef industry and see additional utilization of local processing facilities and infrastructure.
Media Release :9 December 2016
We welcome Mrs Rinehart, the Hancock Group and Shanghai CRED to Kidman and look
forward to Mrs Rinehart visiting our headquarters in Adelaide in the near future.”
Garry Korte, CEO Hancock Prospecting said, “The acquisition of Kidman is transformational for the Hancock beef business and represents a significant step in the achievement of Mrs
Rinehart’s strategy and vision for the cattle business. Her long family history in Pilbara stations, affected by drought over many years, as well as at times flooding and bushfires,
made her appreciate the wisdom of Sir Sidney Kidman’s approach to mitigating the risk with stations being spread over different geographic and climatic regions.
The structure of the acquisition, involving less foreign investment than previously, and ensuring majority Australian shareholding with control in Australian hands, while at the same time facilitating quicker growth through access to additional export markets, may become a more palatable role model for future deal structures in Australia, where foreign ownership is concerned.”
