Firm advises on first post-FTA China agri-deal

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A cross-border King & Wood Mallesons team has advised Bindaree Beef on the sale and issue of a combined 45 percent stake in Shandong Delisi Food Co, one of China’s largest meat processors.

Shandong Delisi Food Co will pay $140m for the stake under the deal, enabling Bindaree Beef to expand its supply of premium beef in China and across Asia.

“It takes a great deal of expertise in both markets to bring the parties together in a way that they can understand the differences in their markets and find a way to build the connection that’s necessary for a good for a long joint venture,” lead partner on the deal Shannon Finch told Australasian Lawyer.

The King & Wood Mallesons team was comprised of lawyers in both China and Hong Kong, as well as in Australia.

“It’s the first major transaction of this type since the conclusion of the China-Australia free trade agreement,” said senior associate Chris Carr.
 
While complex Chinese regulatory requirements had to be met, the deal represents the increased number of opportunities the Chinese and Australian agribusiness sectors now have as tariffs are reduced across a range of products following the completion the of the China-Australia Free Trade Agreement.

“In lots of ways the challenges in an agri-business deal between Australia and China are much the same as in other deals between Australia and China,” Finch said.

“Each party may have a very deep understanding of the sector, and in this case, both companies are very experienced in their markets with a lot of expertise to bring to the table.  But they may have very different expectations of where the deal may head and very different deal experiences, as well as language and cultural barriers.  It’s important to understand all of those challenges.”

King & Wood Mallesons is pleased to have so far seen a steady increase in the number of transactions coming from China and sees this deal as the first of many.

“China presents the biggest food opportunity in the world, and we are delighted to have been able to assist Bindaree Beef on this important deal which extends its footprint into Asia. The cross border deal is a great example of how we are able to use our Asian insights and capability to the benefit of our Australian clients, drawing from expertise across China and Hong Kong throughout the deal process.”
 

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