16 July 2019
The Overseas Investment Office (OIO) has approved a subsidiary of Inner Mongolia Yili Industrial Group Company to buy Westland Co-operative Dairy Company.
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 currently 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. These are:
- The investor test, which means the directors of Yili demonstrated business experience, good character and business acumen.
- The incidental and non-residential use of land test, which means the land will continue to be used in the ways it is currently used – as noise buffer space and as accommodation for factory workers to support the business.
Land Information New Zealand Group Manager, Overseas Investment Office, Vanessa Horne said the law is clear and that Yili met all the requirements needed to buy Westland.
Yili provided extra information the OIO requested during our 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.
The benefit to New Zealand 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 Yili application to be put 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,” Vanessa 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’s purchase still requires approval at a High Court hearing, set for 18 July 2019.
Page updated on 19 July 2019 with new attachment.
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