Sydney | Reuters –– Australia on Thursday blocked the sale of the country’s largest landowner, private farming group S. Kidman and Co., to foreign investors, saying an agricultural area the size of South Korea should remain in Australian hands.
Ownership of farmland is a sensitive political issue in Australia amid concerns that foreign buyers are snapping up properties to cash in on a boom in food demand from Asia.
S. Kidman and Co.’s 10 cattle stations cover more than 100,000 sq. km (25 million acres) of land spread across Western Australia, the Northern Territory, Queensland and South Australia.
The privately owned company said in April it was looking to sell its cattle operations, which hold an average herd of 185,000 cattle, to raise cash for other businesses and investments.
Local media reported that two Chinese companies, Genius Link Asset and Shanghai Pengxin, were leading the race to secure S. Kidman in a deal expected to be worth about A$350 million (C$335 million).
S. Kidman’s largest station, Anna Creek, is partly located on the Woomera Prohibited Area (WPA), a weapons testing range in South Australia.
“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,” Treasurer Scott Morrison said in a statement.
S. Kidman was not immediately available for comment.
Morrison said all bidders had now withdrawn their FIRB applications and it was up to the vendor to decide how to proceed with the sale of the business or parts of it.
Concerned it is losing control of its food security, Australia in February slashed the amount beyond which land purchases would require regulatory approval and said a registry of foreign land ownership would be set up.
From March 1, foreign purchases of agricultural land over A$15 million (C$14.3 million) are subject to regulatory approval from Australia’s Foreign Investment Review Board.
In 2013, Australia rejected a takeover of grain handler GrainCorp by U.S. giant Archer Daniels Midland.
— Reporting for Reuters by Lincoln Feast and Colin Packham in Sydney.