Westland chairman Pete Morrison confirmed the OIO will let the Inner Mongolia Yili Industrial Group subsidiary buy 100% of Westland Co-operative Dairy Company for $3.41 a share.
Shareholders earlier this month voted 94% in favour of the sale.
The remaining key condition is the High Court making the necessary orders approving the sale.
The hearing is on Thursday.
“Satisfying the OIO condition was an important step in the process and the board is delighted that Jingang has been granted consent.
“We have advised our shareholders of the satisfaction of the OIO condition and we will update them further once the High Court process is concluded,” Morrison said.
The investment needed OIO consent because Yili is buying sensitive land, 4.8 hectares of residential land, and significant business assets worth more than $100 million.
The residential land is used for factory worker accommodation at Westland’s two processing plants in Hokitika and near Christchurch and as a noise buffer between the plants and their neighbours.
The OIO approved the application because it met all the tests required under the Overseas Investment Act.
OIO manager Vanessa Horne said the law is clear and Yili met all the requirements needed to buy Westland.
Yili provided extra information the OIO requested during the assessment, she said.
“It’s important to remember that the tests for this investment are quite narrow.
“Yili is not buying rural land, which involves very different tests for investors,” Horne said.
"The benefit to NZ test doesn’t apply to this investment because it doesn’t involve rural land.”
Former Westland shareholders sent a submission to the OIO asking for the application to be put on hold until they get payment for 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.
“I appreciate the high public interest in this application and the OIO is committed to providing as much information as we can so people can understand how we made our assessment.”
Yili chief executive Jianqiu Zhang said if the sale is allowed by the High Court farmer shareholders will receive an immediate cash payment of $3.41 and a 10-year guaranteed competitive milk payout.
“Our goal is to become the most trusted health food provider in the world,”: Zhang said.
“We are very hopeful that our offer will be accepted by the High Court so that we can work towards creating a strong and secure future for one of NZ’s most trusted brands.”
Yili is Asia’s largest dairy producer with the widest range of product lines and one of the largest globally according to the Rabobank Global Dairy Top 20 Report 2018.
Yili owns the Oceania dairy plant at Glenavy, South Canterbury.
