CRED to buy into Kid­man

China Daily (USA) - - BUSINESS - By ZHU WENQIAN zhuwen­qian@ chi­

Chi­nese real es­tate de­vel­oper Shang­hai CRED Real Es­tate Stock Co and an Aus­tralian min­ing gi­ant have agreed to buy 100 per­cent of Aus­tralia’s largest cat­tle com­pany S. Kid­man and Co in a deal val­ued at about A$365 mil­lion ($277 mil­lion)

Un­der the agree­ment, Shang­hai CRED and Aus­tralian bil­lion­aire Gina Rine­hart’s Han­cock Prospect­ing Pty Ltd, will to­gether ac­quire Kid­man, one of Aus­tralia’s largest beef pro­duc­ers, which has 185,000 cat­tle and a land­hold­ing cov­er­ing 101,000 square kilo­me­ters across South Aus­tralia, West­ern Aus­tralia, the North­ern Ter­ri­tory, and Queens­land.

The deal is wait­ing for theChi­nese and Aus­tralian gov­ern­ments’ ap­proval. Last year, the Shang­hai CRED-led bid was blocked by the Aus­tralian gov­ern­ment, cit­ing na­tional se­cu­rity is­sues.

The Aus­tralian reg­u­la­tor is ex­pected to ap­prove the deal this year, as the trans­ac­tion gives Han­cock a 67 per­cent hold­ing, with Shang­hai CRED tak­ing the rest, ac­cord­ing to Han­cock.

China’s con­sump­tion of red meat in 2016

Guo Jie, from Shang­hai CRED, said part­ner­ing with lead­ing local business Han­cock had al­ready proved to be a pro­duc­tive ap­proach, and he looked for­ward to hav­ing the op­por­tu­nity to work with Han­cock through the Kid­man in­vest­ment.

Rine­hart said: “Kid­man is an iconic cat­tle business es­tab­lished more than a cen­tury ago, and an im­por­tant part of Aus­tralia’s pi­o­neer­ing and en­tre­pre­neur­ial his­tory.”

More than 600 par­ties ex­pressed an in­ter­est in Kid­man after it went on sale al­most 18 months ago. Founded in 1899, Kid­man has been a big beef ex­porter to the US, Ja­pan and South­east Asia.

“We wel­come the sig­nif­i­cant in­vest­ment pro­posed in ad­di­tion to the pur­chase price and are con­fi­dent that the Kid­man business will be in good hands,” said John Crosby, chair­man of Kid­man.

In the past fewyears, the ap­petite for red meat in China has con­tin­ued to rise, as a re­sult of chang­ing eat­ing habits, higher dis­pos­able in­comes and grow­ing ur­ban­iza­tion.

China is ex­pected to con­sume 7.4 mil­lion met­ric tons of red meat in 2016, ac­cord­ing to a re­port by the USDA For­eign Agri­cul­tural Ser­vice.

This year, Chi­nese beef im­ports are fore­cast to reach 600,000 tons, jump­ing 20 per­cent year-on-year.

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