Sharechat Logo

Yili's Westland takeover gets OIO approval

Tuesday 16th July 2019

Text too small?

The Overseas Investment Office has approved Inner Mongolia Yili Industrial Group’s purchase of Westland Co-operative Dairy Group, after finding Yili has the relevant business experience and has shown financial commitment.

The $588 million deal to sell the co-operative for $3.41 a share is now closer to completion having received shareholder approval earlier this month. The transaction now needs High Court approval, which is expected this week. 

The OIO said in a statement that Yili - which already owns Oceania Dairy - wanted to extend its kiwi operations and improve its access to high-quality products. Westland employs 573 people in New Zealand and exports about 90 percent of its products. 

OIO approval was required because the transaction value exceeds $100 million and because Westland owned two milk processing plants in Hokitika and Rolleston and about 4.8 hectares of land near those factories were deemed sensitive. 

Yili told the regulator the use of that land would not change and will be used as a noise buffer or for worker accommodation.

The Chinese dairy giant, which has been operating locally since 2013, did not have to prove New Zealand would benefit from the sale, because it did not involve the purchase of rural land. 

Former Westland shareholders had asked the OIO to hold Yili’s application until they received payment for shares they had surrendered when they left the co-operative. The OIO, however, said this was not an issue it could take into account and was instead a commercial issue for the former shareholders to resolve with the new Westland owners.  

Current shareholders in Westland will bank on average $572,000 when the deal goes ahead, ANZ Bank New Zealand has said previously.  Even if a large share of those funds were used to repay debt, it estimated the multiplier effect of the sale would boost the local economy to the tune of about $280 million.

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Nimbys, carparks and the status quo under threat as govt tells big cities: grow up and out
Dairy manufacturers got better prices in June quarter
Orr defends RBNZ rate cut, says monetary policy looks ahead, not behind
RBNZ's Orr says investors need to put their money to work
Auckland building consents hit record in year to June
New Zealand's Commerce Commission files High Court proceedings against Westpac NZ
Reserve Bank to ease lending restrictions if risks decline
Dairy sales push May exports to record high
We All Need to Calm Down About Rare Earths
Will ditching the CGT have revived business spirits?

IRG See IRG research reports