20 Sep 2016

Chinese firm cleared to buy 50% of Silver Fern Farms

8:35 pm on 20 September 2016

A Chinese firm's application to purchase a 50 percent stake in Silver Fern Farms has been approved by the Overseas Investment Office.

Silver Fern Farms CEO Dean Hamilton and board chair Rob Hewett at a special shareholders' meeting in Dunedin on 12 August 2016.

Silver Fern Farms CEO Dean Hamilton and board chair Rob Hewett at a special shareholders' meeting in August. Photo: RNZ / Ian Telfer

The major meat processing company was seeking official approval of the $260 million joint venture deal.

Minister for Land Information Louise Upston today announced that approval had been granted.

"The Overseas Investment Office recommended that we approve Shanghai Maling's application because it meets the criteria set down in the Overseas Investment Act 2005," Ms Upston said.

"We are satisfied that the investment will be of substantial and identifiable benefit to New Zealand, which is the test set out in the Act. The investment will put the company in a better financial position and allow it to increase its exports.

"New Zealand shareholders will continue to have 50 percent ownership of Silver Fern Farms, while benefiting from the injection of funds from the new investor."

Finance Minister Bill English said shareholding farmers seemed to think it was a good deal, which was a good test.

"It's a deal that's been tested by the shareholders of Silver Fern farms a few times, so ministers have seen fit to agree with the recommendation."

Shanghai Maling's $261m investment for half of the business was approved by 82 percent of the company's shareholders last October. A meeting called by dissident shareholders in August failed to change many minds, with 80 percent still backing the move.

Silver Fern Farms chairperson Rob Hewett said the company was thrilled at today's decision, and it was a great day for Silver Fern Farms and for New Zealand.

Mr Hewett said he was always confident Shanghai Maling's investment case was strong, but it had taken longer to get approval than the companies expected.

He said the new joint venture company would start at the beginning of the new year.

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