DecisionConsent granted
Section 12(b) Overseas Investment Act 2005
Section 13(1)(a) Overseas Investment Act 2005
Decision Date19 September 2016
Investment

The Applicant's acquisition of 50% of the fully paid ordinary shares in Silver Fern Farms Beef Limited (to be renamed Silver Fern Farms Limited) via its wholly owned subsidiary Shanghai Maling (Hong Kong) Limited.

This is an overseas investment in sensitive land and significant business assets.

Consideration$261,000,000
ApplicantShanghai Maling Aquarius Co., Ltd
China, People's Republic of (100%)
VendorExisting shareholders of Silver Fern Farms Beef Limited
New Zealand (100%)
Background

The Applicant is a China based company listed on the Shanghai Stock Exchange. It is primarily engaged in the processing, manufacturing, sale and distribution of various food products and is one of the largest beef processors in China.

Silver Fern Farms Limited (“SFF”) is the largest livestock processing and marketing entity in New Zealand. SFF owns around 1,769 hectares of sensitive land. With the exception of land leased for offices, all this land is owned in connection with SFF’s processing plants.

SFF has been, and continues to be, operationally constrained by a high level of debt. The Investment is expected to result in SFF reducing its debt to nil and having cash reserves. This will allow SFF to invest in and improve the efficiency of its plant network as well as advance its value-added strategy.

To enable SFF to gain a greater presence in China, the Applicant will assist it with product development, market research, Government approvals and access to relevant e-commerce sites and 2,000 retail stores over a period of 3 years. The Applicant and SFF are currently working to create a range of retail beef and lamb products specifically for China that are processed and packaged in New Zealand.

New Zealanders, through the SFF Co-operative, will continue to have significant oversight and participation in the Investment. SFF’s existing meat processing operations will remain in New Zealand.

The overseas investment transaction has satisfied the criteria in sections 16 and 18 of the Overseas Investment Act 2005. The 'substantial and identifiable benefit to New Zealand' criteria were satisfied by particular reference to the following factors:

Overseas Investment Act 2005
17(2)(a)(iii) – Increased export receipts
17(2)(a)(iv) – Greater efficiency or productivity
17(2)(a)(vi) – Increased processing of primary products

Overseas Investment Regulations 2005
28(b) – Key person in a key industry
28(c) – Affect image / trade
28(e) – Previous investments
28(i) – Economic interests
28(j) – Oversight and participation by New Zealanders

More informationRobert McLean
Simpson Grierson
Private Bag 92518
AUCKLAND 1141