The Australian government announced on Thursday it had barred foreigners from buying a company that owns the world’s largest cattle ranch and other Australian farmland greater in area than South Korea.
The company, S. Kidman & Co. Ltd., owns 10 cattle ranches, a bull breeding stud and a feed lot covering 101,411 square kilometers (39,155 square miles) in four states. That’s an area bigger than South Korea and almost as big as the U.S. state of Virginia.
Treasurer Scott Morrison said that Australia’s Foreign Investment Review Board, or FIRB, found that the sale to foreign investors would be contrary to the national interest.
Kidman owns the world’s biggest cattle ranch, Anna Creek Station, which covers 23,677 square kilometers (9,142 square miles) of arid central Australia. Half of it is inside the 122,188 square kilometer (47,177 square mile) Defense Department-controlled Woomera Prohibited Area, or WPA, the world’s largest rocket firing range.
“The WPA weapons testing range makes a unique and sensitive contribution to Australia’s national defense and it is not unusual for governments to restrict access to sensitive areas on national security grounds,” Morrison said in a statement.
“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,” he added.
Morrison left open the possibility of the company being split up and partially sold to foreign interests without Anna Creek.
Don Manifold, a director of Ernst and Young who is managing the sale, was not immediately available for comment on Thursday.
He said last month that he expected between six and 12 bidders would lodge formal offers. He would not say how many were foreigners. From that list, a preferred buyer was to be chosen before the end of the year.
Media speculated that the company would sell for more than 300 million Australian dollars ($210 million).
At least three Chinese bidders were reportedly interested in buying the Adelaide-based company which was founded by beef baron Sir Sidney Kidman in 1899 and is now largely owned by his descendants.
The Defense Department blocked two Chinese investments in mines on security grounds in 2009 because they were within the Woomera range.
The FIRB rarely intervenes in corporate sales. But increasing foreign ownership of Australian farmland has become a politically sensitive issue.
The Australian beef industry is emerging from years of low profitability due to drought and a high Australian dollar inflated by a mining boom that has now passed.
Despite the size of Kidman’s land holdings, its ranches are largely semi-desert and carry only an average herd of 185,000 cattle, which is a fraction of a percent of the total Australian herd.