The government has given the green light for China's Shanghai Maling Aquarius to acquire half of Silver Fern Farms, New Zealand's biggest meat company, with ministers satisfied it will deliver "substantial and identifiable benefit".
Land Information Minister Louise Upston and Associate Finance Minister Paula Bennett today approved the long-delayed deal on the recommendation of the Overseas Investment Office, they said in a statement. The ministers received the recommendation earlier this month and had until September 30 to meet the terms of the deal.
"The investment will put the company in a better financial position and allow it to increase its exports," Upston said. "New Zealand shareholders will continue to have 50 per cent ownership of Silver Fern Farms, while benefiting from the injection of funds from the new investor."
Upston and Bennett turned down an application last year by Chinese investor Shanghai Pengxin to buy the iconic Lochinver Station, a central North Island property.
Overseas Investment Office approval for the $261 million deal was first sought in October last year, and had been slated to go unconditional by June 30, but delays in the approval process saw the companies agree to a revised date of September 30.
The deal would enable Silver Fern to repay its debt, removing a threat from its banking syndicate to withdraw support. It would also enable it to tap Shanghai Maling's supply chain and parent Bright Food's wholesale and retail networks to distribute into China.
The deal attracted opposition from some of the cooperative's shareholders who forced a second special meeting and gained political backing from NZ First leader Winston Peters, though directors said the vote wasn't binding and wouldn't change their mind.
Silver Fern Farm shareholders reaffirmed their support for the sale at a meeting last month, which was called by a group of farmer-shareholders opposed to the deal.
The OIO decision summary said the deal will enable Silver Fern to expand its presence in China, with Shanghai Maling assisting it "with product development, market research, Government approvals and access to relevant e-commerce sites and 2,000 retail stores over a period of three years."
Silver Fern will tailor beef and lamb products for the Chinese consumer that are locally processed and packaged.
New Zealand First leader Winston Peters, who has been a vocal critic of the deal, said the government was selling out to China.
"Profit was written down 86 per cent, debt was written up 24 per cent - a demonstrable lie right under [the media's] nose. These ministers are condoning that behaviour."
Peters said the OIO was a "rubber stamp" operation.
"They are not interested in facts. They are interested in doing the government's job because they have been hand-picked to do just that - to be a rubber stamp."
Asked if it was a good deal for farmers, Finance Minister Bill English said the shareholders had made their decision after thorough debate.
"It is up to them. And they seem to think it's a good deal - that's a pretty good test.
"The meat industry, generally, when times are tough has struggled for the capital to really help it lift value in its product. And China has become a big customer."
Act Party leader David Seymour said Peters' comments showed he was unfit to be in Government.
"It's disturbing that Winston Peters, who could potentially hold the balance of power after the election, would override the recommendation of the Overseas Investment Office and block the partial sale of a private company.
"What's Winston so afraid of? Does he think the cows will literally get shipped off to China? That the land itself will disappear? He's just stirring up more anti-Chinese sentiment for cheap political gain."