Newsmaker: S Kidman & Co

The huge Australian cattle company is close to a takeover, with Australian and Chinese bids in the mix, but the deal has implications that have reached far beyond the business world.

Kagen McLeod for The National
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In 1870, a 13-year-old boy ran away from home in Adelaide, South Australia, to forge a future in the outback, where fortunes were being made and lives lost by pioneers wresting a living from the harshest of landscapes.

With a one-eyed horse called Cyclops for company and just a few shillings in his pocket, ­Sidney Kidman could not possibly have foreseen the astonishing events he had set in motion.

Kidman would go on to found a cattle company, S Kidman & Co, which by the First World War had put him in control of an area of Australia much larger than the whole of England.

By the turn of the century, he had already been dubbed The Cattle King, and in 1921, he was knighted by King George V of England for services rendered to the Commonwealth of ­Australia during the Great War.

Least imaginable of all, perhaps, almost 150 years later, is that his company would be thrust into the global spotlight by a multimillion-dollar take­over battle that has reawakened Australia’s pride in its tough, pioneering past and stirred fears that foreign ownership of S ­Kidman & Co would somehow undermine that outback ­heritage.

Sidney Kidman was born in Adelaide on May 9, 1857, the third son of George Kidman, a farmer who died seven months after Sidney was born, and his wife, Elizabeth. The couple had emigrated to Australia from ­Suffolk, England, in 1848.

Kidman’s inspirational life is memorialised on a website by the South Australian government. As he picked up work as a drover, herding livestock, “he learnt bush skills from ­Aboriginal co-workers and developed a respect for their knowledge of the land, tracking animals and survival in harsh environments”.

The teenager’s ultimate destination was the Barrier Range, mountains in the western region of New South Wales, more than 500 kilometres from ­Adelaide, that encircle the isolated city of Broken Hill, which was then a rough, tough mining town.

Here, Kidman hoped to find work, and by chance his arrival coincided with a mining boom, triggered by the discovery of large copper deposits. He was quick to exploit that good timing. With thousands of hungry miners to feed, Kidman set up as a butcher, slaughtering cattle from the herds he drove in.

It was a tough, challenging life, but Kidman, following in the footsteps of his elder brothers George and Sackville, learnt fast.

A 1933 article in The Land, the newspaper of the Farmers & ­Settlers' Association of New South Wales, celebrating the 50th anniversary of Broken Hill, gives a flavour of the times. Kidman had his start driving bullocks and "rouseabouting" – odd-­jobbing – for 10 shillings a week at Mount Gipps, a remote sheep station that had been in existence long before the miners came.

It was “a lonely outpost [in] an almost waterless land of shimmering heat, where many a venturesome prospector left his bones”. There, he “also learnt to ride buckjumpers [rodeo horses], for in his young days, Kidman was one of the best rough riders in the ­country”.

Kidman's rise wasn't without setbacks, as an obituary in The Northern Miner recalled after his death, at the age of 78, in 1935. Before he was 21, "a fortune slipped through his fingers", when he sold a share in the Broken Hill Proprietary mine (which later became mining giant BHP) for £150 to buy 10 bullocks. Later, when the mine boomed, "his share was worth £1.25 million".

Undeterred, Kidman pressed on, graduating from jack-of-all-trades – “drover, mail contractor, coach driver” – to become a horse breeder and cattle buyer. In 1878, he used an inheritance of £400 from his grandfather to set himself up as a “squatter”, leasing a parcel of Crown land for grazing stock, and in doing so, laid the foundation stone of the company that has survived to this day.

In 1895, Sidney and Sackville bought Cowarie, a cattle station of 1,036 square kilometres north-east of Lake Eyre. It was to be the first of many. Kidman had an ambitious plan to create a chain of stations from the “generally well-watered” country of south-west Queensland to the south, along which cattle could be driven to market.

A second chain followed, and by the eve of the First World War, S Kidman & Co, founded in 1899, owned 68 separate stations, 176,000 head of cattle, 215,000 head of sheep and more than 220,000 square kilometres of land – an area almost the size of Great Britain.

Today, S Kidman & Co, which has been passed down through five generations of the family and remains mainly family-­owned, ­remains Australia’s largest ­private landholder, with pastoral leases covering 101,000 square kilometres, an area about 20,000 square kilometres larger than the entire UAE. It’s a vast operation that supplies grass-fed beef to Japan, the United States and South East Asia. One of its stations, Anna Creek in South Australia, is the world’s largest, at 23,000 square kilometres. It’s almost one-third of the size of the UAE.

The news broke in April last year that the entire unlisted public company was being put up for sale, signalling the end of more than a century of history. Eight potential buyers were shortlisted, from Australia and overseas. But in ­November, after rumours spread that two Chinese buyers were in a bidding war, the Australian government announced it would block any sale to an overseas buyer, even though most of the company’s meat was exported.

This, said government treasurer Scott Morrison, would be “contrary to the national interest … The parcel of land that we’re talking about is some 1.3 per cent of Australia’s land mass, some 2.6 per cent of the agricultural land”.

Some of that land, the huge Anna Creek Station, is located within the Woomera ­Prohibited Area in South Australia and adjacent to a sensitive military weapons-testing range.

According to a poll earlier this year by the Lowy Institute, the government’s concerns were shared by 69 per cent of the Australian public, who were “strongly against” any farmland falling into foreign hands.

The Kidman family shareholders were reportedly resisting the idea of breaking up the firm, but the state ban on foreign ownership appeared to have sounded the death knell for the historic company. In May, the government again stepped in, blocking a bid of 371 million ­Australian dollars led by Chinese company ­Dakang ­Australia ­Holdings, which would have given it an 80 per cent stake.

On October 10, Australia’s richest woman, Gina ­Rinehart, chair of privately owned minerals company Hancock ­Prospecting, was reported to have reached an agreement to buy 67 per cent of S Kidman & Co for 365m ­Australian dollars. The Chinese were in the frame again, but this time as one-third minority partners in the shape of real-estate company Shanghai CRED. If the bid was successful, the Kidman name would be consigned to history – the new company would have been called Australian ­Outback Beef.

Then on Sunday, The Sydney Morning Herald reported that "an all-Australian consortium" of four big grazier families had entered the running with a bid of 386m Australian dollars for 100 per cent of S Kidman & Co. If successful, "Kidman would stay totally Australian-owned" and would "triple the size of the cattle herd marketed under the Kidman name".

Where there was “a credible, 100 per cent Australian bid”, said South Australia senator Nick Xenophon, “it would be unforgivable for the federal government not to approve a 100 per cent local bid.”

But facts have been blurred in what has become, in the words of The Sydney Morning Herald, the "hot political issue" of domestic ownership of agricultural land, "seen as crucial for the country ... to keep tax revenues onshore". One fact largely overlooked in the heated debate is that S ­Kidman and Co is already 34 per cent foreign-owned. Another is that the prospective Australian buyers would divide up the Kidman land holdings between them.

Meanwhile, Hancock’s chief executive, Garry Korte, insists its bid is “Australian ... you don’t get much more Australian than fourth-generation Australian Gina Rinehart, so let’s not start to pretend otherwise”.

It remains to be seen whether Australia’s Foreign Investment Review Board will approve the Hancock bid. If it does, the inheritors of the Kidman legacy face a dilemma. Choosing between the two bids would be “a balancing act of sentiment and history and price in the minds of the shareholders”, ­Kidman managing director Greg ­Campbell said on Tuesday.

In many ways, the story of S Kidman & Co is the story of ­Australia itself – of a company and a country that started out with next to nothing, but through its strength of will and sheer hard work, became a global force to be reckoned with. If the company, and its name, is consigned to history, many ­Australians will feel the loss.

In March last year, just a month before S Kidman & Co was put up for sale, Sidney ­Kidman’s great-grandson, Christo Reid, published a collection of photographs documenting “The extraordinary life of Sir Sidney Kidman”. Kidman, said Reid, “was given extraordinary loyalty. Once someone [was] working for Kidman it was a badge of pride.”

On the careers page of its website, Australia’s “most respected and successful beef producer” still states proudly, but now not without poignancy, that “we’ve provided a rural career for your great-grandfather, your grandfather and your father; we plan to be here for your children too.” But perhaps for not much longer.