Saudi Agricultural and Livestock Investment Company confirms first Australian investment

SALIC has bought a large aggregation from the Nicoletti in a deal that also represents its investment into sheep production.

Saudi Agricultural and Livestock Investment Company has confirmed its acquisition of the Baladjie aggregation in Western Australia’s wheatbelt following approval from the Foreign Investment Review Board, as reported by Agri Investor in February.

The purchase represents SALIC’s first investment in Australian agriculture and is one of the largest single parcels of broadacre agricultural land to be sold in the country to date.

SALIC has purchased the property, which spans more than 200,000 hectares, from the Nicoletti family. The sale price was not disclosed but is understood to be as much as A$70 million ($50 million; €44 million).

The transaction included other land that the Nicoletti family held an option on, as well as further land from other farming families that was brought into the deal when the aggregation went to market.

The aggregation includes 76,575 hectares of freehold cropping land, of which 62,768 hectares is arable, and 127,018 hectares of leasehold land that has been assigned to SALIC, of which 95,040 hectares is arable. It will be used for broadacre cropping but also carries a 40,000-head Merino sheep flock, plus rams and progeny.

Market sources have told Agri Investor that SALIC was particularly interested in the sheep flock, although no major changes are anticipated to the operation of the Baladjie aggregation in the short term. As well as being the firm’s first investment in Australia, it is also its first investment in sheep production globally.

Riyadh-headquartered SALIC has also been exploring the possibility of opening an office in Perth as part of its strategy to invest in Australia, multiple sources said.

SALIC is a wholly-owned subsidiary of SALIC KSA, the Riyadh-headquartered investment company by Saudi sovereign wealth fund, the Public Investment Fund. It was established in November 2011 with paid-up capital of three billion Saudi riyals ($800 million; €705 million).

The sale of Baladjie was overseen by CBRE Agribusiness. Regional director Danny Thomas said the transaction was the culmination of five years’ work with the Nicolettis and that SALIC was attracted by the property’s quality and scale.

Thomas was also critical of the amount of time taken by the Foreign Investment Review Board to approve the transaction.

“We had approved terms for this deal in place in around October or November last year, when the vendor’s FIRB application would have been submitted,” he told Agri Investor.

“It’s taken a frustrating amount of time to receive approval from FIRB. In situations like this it can create a lot of anxiety for everybody involved in the transaction when they are waiting for a yes or no answer.”

Thomas said FIRB generally seemed to be taking longer to approve transactions involving foreign capital of late and questioned the body which is meant to adhere to a 30-day deadline to provide findings.

He added that FIRB had requested around “six or seven” extensions during its deliberation process which had led to the long delay.

The Baladjie aggregation is located between Merredin, Mukinbudin, Bullfinch and Southern Cross, and includes more than 25 dwellings, 12 shearing sheds, machinery and storage.

In a statement, John and Julie Nicoletti said: “We would like to congratulate SALIC on its acquisition of our business as well as a number of our neighboring properties.

“This purchase represents the culmination of a lifetime of work for us and others – and we are delighted that the enlarged business will be stewarded by the SALIC team into the future. Importantly, we are most grateful to our staff for their dedication and loyalty over many years.”

The Nicoletti family divested from the properties to focus on running a string of John Deere dealerships that it owns across WA’s Wheatbelt.

The family sold 70,000 hectares of land to Hong Kong-based CK Life Sciences in 2016 in what was then the biggest single offering of freehold land in Western Australian history.

SALIC did not respond to a request for further comment by time of publication.