Fund manager says without deeper capital markets troubled firms will go overseas.

As Fisher & Paykel Appliances falls into Chinese ownership a prominent fund manager is warning that more local companies will pass into foreign hands unless New Zealand deepens its capital markets.

In the climax of an almost two-month long takeover battle, Qingdao-based Haier yesterday secured ownership of over 90 per cent of F&P Appliances' shares, winning the right to compulsorily acquire the rest of the nearly eight-decade-old Kiwi manufacturer.

It can now de-list the East Tamaki-based firm from the NZX and have unrestricted access to its valuable technology, such as direct drive washing machine motors.

Brian Gaynor, an executive director at Milford Asset Management, which had owned shares in F&P Appliances, said its slide into full foreign ownership began when Haier purchased a 20 per cent stake in the company in 2009.


At that time the New Zealand firm was struggling beneath almost $500 million worth of debt as it relocated its manufacturing to lower-cost countries while the global financial crisis was sapping demand in its key appliance markets.

"The reality is that when this company got into trouble they had to go to the Chinese to help bail them out," Gaynor said.

"The slide starts that way - if you don't have the capital resources in your country to support businesses who get into trouble they will go offshore." Haier has indicated that it intends to keep F&P Appliances as a stand-alone business run by local management.

The Chinese firm has also said it plans to expand the company's New Zealand-based research and development team, and not shut down remaining Auckland-based manufacturing operations.

Technology commentator Peter Griffin said such promises were often made during foreign takeovers of local technology firms, but history had shown they were not always kept. "It is a major hit when a company the size of Fisher & Paykel Appliances goes because we lose the control and then we're just at the forces of international markets," Griffin said.

"It [F&P Appliances] could be gone completely from New Zealand shores within two years."

Figures from the Technology Investment Network show 33 of this country's biggest technology firms, including F&P Appliances, have passed into foreign ownership over the past decade.

Sir Peter Maire, who sold navigation device maker Navman to US firm Brunswick Marine in 2004, told the Business Herald in September that Kiwi tech companies were bought for their intellectual property but "in time they end up being gutted".


Labour economic development spokesman David Cunliffe said yesterday had been a dark day for high-tech manufacturing in this country, with crystal oscillator maker Rakon also announcing that it would shift manufacturing to lower cost plants in China and India, cutting up to 60 local jobs in the process.

"New Zealand has lost an icon with Fisher & Paykel officially sold to Haier," Cunliffe said.

"It's worrying news and Labour will hold Haier to its assurances that Fisher & Paykel's research will stay in New Zealand."

Citing Statistics NZ figures, he said this country had shed 5700 manufacturing jobs in the past year.

Haier's Liang Haishan said the company was very pleased with the position it had achieved. "We are delighted that a significant majority of shareholders have recognised the value of our offer."

Whiteware clean-up
92.8 per cent - Haier's shareholding in F&P Appliances last night


Offer price
* $1.28 per share, raised from $1.20 per share last month
*Takeover values F&P Appliances at $927m.