October 14, 2015


Chinese grain firm bids for Australian beef producer



Guangzhou-based Donlinks Grain & Oil Co. Ltd. has entered the bidding for one of Australia's biggest beef producers and landholders, S. Kidman & Co., according to a statement released by the company.


Donlinks said it will form a consortium with Genius Link Capital Ltd., an asset management company, to make a second-round offer for S. Kidman & Co. Ltd. on October 27.


S. Kidman & Co. is one of the largest beef producers in Australia with a herd of 185,000 cattle. It owns 11 cattle stations, including the world's largest, Anna Creek, and has leases for 102,000 square kilometres of land in the states of Queensland, South Australia, Western Australia and the Northern Territory.


The beef producer has been up for sale since April, according to a statement from the Kidman family, which owns 98% of the company.


The winning bid is likely to fetch more than US$236 million, said Ernst & Young, which is handling the deal. If successful, Donlinks would own 51% of S. Kidman & Co.


Several other Chinese companies are bidding for the Australian firm. The Financial Times reported that Shanghai Pengxin Group, a conglomerate engaged in real estate, building infrastructure, mining and high technology, and a consortium led by the real estate company Shanghai CRED were also in the running.


An analyst at Beijing Orient Agribusiness Consultant Ltd. also said Chinese agribusiness company New Hope Group is a bidder.


The companies are said to want to capitalise on growing beef demand in China.


In July, Australia signed an agreement to ship one million heads of live cattle to China over the next eight to 10 years.


The winning bidder will be announced in November, S. Kidman & Co. said on October 9. An acquisition must be approved by Australia's Department of Defense as S. Kidman & Co. owns properties in militarily-sensitive areas.