Macquarie snaps up 49% of Australia's massive Cubbie Station from China's Ruyi
(Recasts to quote statement, adds background)
By Paulina Duran and Byron Kaye
SYDNEY, Aug 2 (Reuters) - Australia's Macquarie Group
has purchased a 49% stake in cotton farm Cubbie Station
from a consortium led by Chinese conglomerate Shandong Ruyi
for an undisclosed sum, the parties said in a joint
statement on Friday.
The sale comes seven years after Australia's government
approved Shandong Ruyi's A$232 million ($158 million) purchase
of an 80 percent share in Cubbie on condition it would cut its
stake to 51% within three years. (https://reut.rs/2LVEuNd)
"Cubbie is one of Australia's premiere agricultural assets
and aligns with our investment thesis for long-term sustainable
farming operations," Liz O'Leary, the agriculture head of
Macquarie's Infrastructure and Real Assets division, said in the
The 2012 sale of one of the southern hemisphere's largest
irrigation farms to China's Ruyi had drawn anger from some
lawmakers who said Australia was losing control of a strategic
Macquarie's acquisition follows a three-year drought in
eastern Australia and comes amid criticism of a tax-payer funded
environmental scheme to buy water rights from irrigators because
it funds developments that lead to higher water usage.
"It's the bottom of the market for that business," said Rod
Campbell, research director at The Australia Institute, a public
"Cubbie was the originator of a business model based on
floodplain harvesting and diverting huge volumes of floodwater
into their own private dams."
Located across Australia's Murray-Darling food bowl area in
Queensland state, the 93,000-hectare (229,810 acres) Cubbie
property can grow up to 330,000 bales of cotton in a good year,
as well as some wheat, barley, sorghum and corn. It also has
water entitlements enough to fill Sydney Harbour.
"Maybe they can sell off some water rights. If they're
paying the right price and it rains again, then Cubbie could
well turn a dollar for them," Campbell said.
"In addition, the chance to sell overland flow licences
might be something that, if you're well-connected and lucky,
maybe you can do."
As part of the deal, Cubbie would contribute up to 10
gigalitres of water to the nearby river-system in dry periods
without any compensation from the government's water scheme,
according to the statement.
That is a fraction of the 469 gigalitres of water Cubbie
Station can store, according to reports by the Australian
Macquarie's purchase has regulatory approvals but remains
subject to certain conditions precedent, the statement said.
Shandong Ruyi, based in the eastern Chinese province of
Shandong, is a major player in China’s textile market and ranks
among its top 500 companies, with annual sales exceeding 20
billion yuan ($2.9 billion).
($1 = 1.4680 Australian dollars)
($1 = 6.9360 Chinese yuan renminbi)
(Reporting by Paulina Duran; Editing by Himani Sarkar and
First Published: 2019-08-02 05:51:52
Updated 2019-08-02 08:17:09
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