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The Hon.

Scott Morrison MP
Friday 29 April 2016


As part of my long and careful deliberations regarding the acquisition by foreign investors of S. Kidman
and Co. Limited, consistent with the formal process required, I have today informed the investor that my
preliminary view of the proposal that has been put to me is contrary to the national interest.
Australia welcomes foreign investment, however we must be confident that this investment is not
contrary to the national interest.
Australians must have confidence in how we regulate foreign investment, to ensure continued support
for foreign investment that is critical to our economy in providing jobs and growth. This is a relevant
On 15 April I exercised my statutory discretion to extend the period in which I have to review this
application. I did this in order to provide me with sufficient time to consider this complex case. Without
this extension I would have been required to have made a decision that week. This additional time has
assisted me in forming my preliminary view.
The Kidman land portfolio is the largest private land holding in Australia. The Kidman portfolio holds
approximately 1.3 per cent of Australia's total land area, and 2.5 per cent of Australia's agricultural land.
Even after the excision of Anna Creek and The Peake properties, Kidman will still be Australia's largest
private land owner and hold over 1 per cent of Australia's total land area, and 2 per cent of Australia's
agricultural land.
Given the size and significance of the Kidman portfolio I am concerned that the acquisition of an 80 per
cent interest in S. Kidman & Co Limited by Dakang Australia Holdings Pty Ltd (Dakang) may be contrary
to the national interest. I have today made my concerns known to the applicant and provided them with
a natural justice period in which they may respond and consider how they wish to proceed. The
applicant shall have until next Tuesday 3 May 2016 to respond.
I have concerns that the form in which the Kidman portfolio has been offered as a single aggregated
asset, has rendered it difficult for Australian bidders to be able to make a competitive bid. The size of
the asset makes it difficult for any single Australian group to acquire the entire operation.
On 20 April I commissioned an external and independent Review of the Kidman sale process to examine
market integrity issues around the Kidman sale process so that I could be fully informed. The Review,

conducted by Professor Graeme Samuel AC, was tasked with providing advice on whether the
competitive bid process offered fair opportunity to Australian bidders to participate.
The Review contains sensitive commercial in confidence material which precludes its release. While the
review found the sale process followed a satisfactory commercial practice that offered opportunity to
Australian parties to make an offer, the review also found there remains significant domestic interest in
I outlined my concerns in my announcement and decision on Kidman on 19 November 2015. I noted
then that the size and significance of the total portfolio of Kidman properties in the proposed form as a
single composite property asset was not in the national interest. I am not yet satisfied these concerns
have been addressed by the revised proposal that has been submitted to me.
The size and significance of the portfolio, combined with the impact the decision may have on broader
Australian support for foreign investment in Australian agriculture, must also to be taken into account in
this case.
The Turnbull Government welcomes foreign investment where it is consistent with our national
interests. However, we must always ensure it is on our own terms. There are not too many jurisdictions
anywhere in the world where foreign acquisition of large holdings would be permitted.
As Treasurer I have approved many significant foreign investment proposals and I consider each on its
Foreign investment has underpinned the development of our nation and we must continue to attract
the strong inflows of foreign capital that our economy requires. Without foreign capital and investment,
Australia's output, employment and standard of living would all be lower.
Foreign investment rules facilitate such investment while giving assurance to the community that the
investment is being made in a way which ensures that Australia's national interest is protected
We will continue to welcome and support foreign investment that is not contrary to our national
Further information: Julian Leembruggen 0400 813 253, Kate Williams 0429 584 675