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Business / Companies

CRED to buy into Kidman

By ZHU WENQIAN (China Daily) Updated: 2016-10-11 08:26

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 the Chinese 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.

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 few years, 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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