China’s PengXin plans to round up CPC and Kidman
Chinese real estate, infrastructure and agricultureconglomerate ShanghaiPengXinGroup wants to combine Australian beef giants Consolidated Pastoral Company and S Kidman & Co in a $1 billion-plus deal.
Street Talk understandsPengXin, advised by BDO, is involved in the auctions for bothcompanies andintendsto createa cattle powerhouse to rival ASX-listedAACo.
PengXinwould use CPC to export to Asia, given itsproperties span the Northern Territory,Queensland, and Western Australia's north, while it would use South Australian-focused Kidman toservicethe domestic market.
A newagreementallowing Australian live cattle to be sold to China, as well afree trade agreement between the two countries, has sparked Chinesedemand forlocal beef assets.
The Australian Financial Review revealed CPC was placed on the market after its London-based private equity owner Terra Firma received anumberof inboundapproaches.
CPC, which was formerly owned by the Packer family, has 375,000 head of cattle, while Kidman has 180,000. This compares toAACo's570,000 head of cattle.
In terms of land,a CPC andKidman combined groupwould far surpassAACo, given Kidman is Australia'sbiggest land owner with 11 million hectares.
CPC is understood to be worthnorth of $750 million, while Kidman is expected to fetch around $300 million.
PengXinestablished itself as the number three dairy player in New Zealand via aconsolidation-based strategy, similar to what it is proposing with CPC and Kidman.
It embarkedonstring of acquisitions after picking upCrafarFarmsforNZ$200 millionin 2012,and now controls 40 farms covering 29,000 hectares across the North and South Islands.
PengXin'sbillionaire owner JiangZhaobaihas sought to transfer part of the company to Shenzhen-listedHunanDakang, of whichZhaobaiowns about 55 per cent.
But New Zealand'sOverseas Investment Office requires PengXin'sKiwi assets to be offered to New Zealander's ifthe company is to be restructured.
SoPengXinplacedall of its Kiwi assets for sale on digital commerce website Trade Me for the required 20 days.
HunanDakanghas a joint venture with high-end distributorXuelongBeef, which gives it more than 120 points of distribution throughout China.
Street Talk revealedAustralia's biggest livestock exporterWellardGroup hadappointed UBS for a run at the ASX boards.
Wellardis a livestock trader and operator, while CPC and Kidman are beef producers.
