Tuesday, March 19, 2024

Dairy co-op’s sale is finalised

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It’s a done deal. Westland Milk Products is destined for Chinese ownership.
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The sale to Chinese dairy giant Yili passed its final test on Thursday with the High Court giving its seal of approval.

“Overall, the proposal appears in the interest of the shareholders. In this particular case, for those reasons, the court is satisfied it is appropriate to make the orders sought in the application,” the court finding said. 

The sale to Yili subsidiary Hongkong Jingang Trade Holding Company’s Jingang earlier last week got the nod from the Overseas Investment Office.

The OIO approved the sale at $3.41 a share for a $588 million.  Shareholders are also guaranteed a 10-year competitive milk payout. 

Earlier this month they voted 94% in favour of the sale, effective on August 1, the date they will be paid and when the directors will be redundant.

“Satisfying these two remaining key conditions was an important step in the process and the board is delighted that Jingang has been granted consent,” Westland chairman Pete Morrison said.

“I will be able to get life back to normal,” Morrison said.

The investment needed OIO consent because Yili is buying 4.8 hectares of residential land and significant business assets worth more than $100m.

The residential land is used for factory worker accommodation at processing plants in Hokitika and near Christchurch and as a noise buffer between the plants and their neighbours.

OIO manager Vanessa Horne said the law is clear and Yili met all its requirements.

A group of former Westland shareholders asked the OIO to put the application on hold until they received payment for the shares they surrendered when they left the co-operative.

“This is a commercial issue for the former shareholders to resolve with the new Westland owners,” Horne said.

“The law is straightforward about what the OIO can take into account when assessing applications and these sorts of issues fall outside it.”

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