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Roundup: Australia's largest beef company close to deal with Chinese company: local media

Xinhua, November 9, 2015 Adjust font size:

Australia's largest beef company, S. Kidman & Co. has entered exclusive secondary talks about selling its enterprise to Chinese company Shanghai Penxing Group, local media reported.

The Australian Financial Review (AFR) reported on Monday that the Chinese conglomerate had entered a "period of exclusivity" with S. Kidman & Co., with a bid reportedly on the line for up to 250 million U.S dollars.

S. Kidman & Co. is one of Australia's largest beef producers, with almost 200,000 heads of cattle spread across 121,000 square kilometers - or 1.6 percent of the total Australia continent.

Since April, a number of overseas firms had submitted bids to purchase the company which owns 17 pastoral leases and two freehold grazing operations in central Australia.

However, on Monday, S. Kidman & Co.'s Managing Director Greg Campbell dismissed suggestions that Shanghai Pengxin was the only bidder left in the equation; he told Xinhua the beef company was still in negotiations with a number of bidders.

"It's obviously at the pointy end of negotiations but I can't say more than that," Campbell told Xinhua on Monday.

"I can't confirm how many bidders the company is dealing with except to say it's more than one."

According to the AFR's report, a number of Chinese companies were still interested in S. Kidman & Co., including Donlinks Grain and Oil Company, Ningbo Xianfeng and RIFA Holding Group.

Campbell said the Chinese interest has been consistent throughout the tender process, indicating that the recent free trade agreement signed between Australia and China (ChaAFTA) had not affected the selling price of the company.

Under the landmark FTA, tariffs on Australian beef will be slashed so that Chinese buyers can get consistent, quality Australian beef at more competitive prices, but Campbell said it had little impact on the purchase prices submitted by the potential buyers.

"I don't think the price has been impacted by the China free trade agreement. There has already been quite a flow of beef into China over the last few years," Campbell told Xinhua.

"The company and its sales team have ever put a price on the business, but the bid teams (from the bidders) have reached a price that they have tendered."

Campbell was unwilling to comment on the prices submitted by the companies with interest in S. Kidman & Co. Endit