Hongkong and Shanghai Banking Corporation’s New Zealand mortgage and home loan book was sold to an Australian business. Photo / 123rf
A loan book sale for $1.25 billion topped the 10 most valuable sales of New Zealand assets in the latest year involving foreign entities.
Toitū Te Whenua Land Information New Zealand’s Overseas Investment Office (OIO) provided a list of the largest deals where asset values were revealed.
In many cases, the value of assets involved in transactions by foreigners needing consent can be suppressed so we have no idea of worth.
The 10 deals won consent between October 1, 2023, and September 30, 2024.
All up, consents were granted for 141 transactions worth a gross value of $9.27b in that period.
That is less than half the value of the previous year. In the year to September 2023, 105 consents were granted for transactions with a gross value of $19.6b, the OIO said.
Murray Horton of the Campaign Against Foreign Control of Aotearoa isn’t rejoicing.
“This list shows just the biggest players in one year of the relentless takeover of the New Zealand economy by transnational corporations.
“The operative word is takeover, not investment. Bear in mind that any business takeover below $100 million does not require any OIO involvement,” he complained.
Horton has campaigned for more than 40 years against foreigners buying New Zealand assets.
Late last decade, foreigners except Australians and Singaporeans were barred from buying residential property in New Zealand to bring this country into line with many others, which also ban this.
Most valuable deal of latest year: $1.25b mortgage loan book sale
Hongkong and Shanghai Banking Corporation’s New Zealand mortgage and home loan book was sold to an Australian business.
The 47% Asian banker sold to Pepper New Zealand, 45% Australian-owned.
The asset value was listed, and Pepper was described as an alternative home loan provider and a wholly owned subsidiary of Pepper Money, listed on the ASX with a market capitalisation of A$618m ($682m).
“The applicant is acquiring the investment following the vendor’s announcement in June 2023 that the vendor is exiting its wealth and personal banking business in New Zealand. The investment consists of loans to approximately 2050 New Zealand retail customers being approximately 0.5% of the total market for residential mortgage loans in New Zealand.
“Consent was granted as the applicant met the investor test and the Minister of Finance has decided that the investment is not contrary to New Zealand’s national interest,” the decision said.
The deal won consent on November 13, 2023.
Pepper Money was established here in 2011 when it bought GE Capital’s Australian and New Zealand home lending business.
Second largest: $700m wealth advice, asset management business sale
Shares in businesses offering wealth advice and asset management were traded in this deal, consented on February 21, 2024.
Vendor National Australia Group is 95% Australian and BNZ’s parent.
Buyer Jarden Seven is 30% Australian and 19% New Zealand owned.
This was a financial services consolidation deal.
In April 2024, FirstCape Group said it would “bring together JBWere New Zealand, Jarden Wealth, Harbour Asset Management, and BNZ Investment Services with 113 advisers and a combined $44b worth of funds under management, advice and administration”.
FirstCape Group is 45% owned by National Australia Bank, 35% by Pacific Equity Partners, and 20% by Jarden.
The FirstCape board chairman is Matt Whineray, and the chief executive is Malcolm Jackson.
Third largest: $579m dairy deal
Cayman Islands-incorporated, Hong Kong-stock exchange-listed China Mengniu Dairy Company (24% Hong Kong, 23% Chinese) won consent to increase its shareholding in Yashili International.
It bought shares from Danone Asia Baby Nutrition (51% American, 19% European).
The OIO granted consent on September 13, 2024.
“As part of a wider international transaction the applicant has increased its shareholding in Yashili International Holdings from approximately 51% to 100% by way of two transactions, - the Danone Transaction and the scheme of arrangement,” the OIO said.
China Mengnui did not get consent under the Overseas Investment Act 2005, therefore this was a retrospective application for consent for the transactions.
Fourth largest: $410m insurance deal
Global insurance, reinsurance and risk transfer business Resolution Life (24% Australian) won consent to buy all the shares in Asteron Life (65% Australian), a licensed insurer of life and disability insurance products.
Consent was granted on June 13, 2024.
In April this year, the Herald reported that Australian-owned insurance giant Suncorp Group is continuing to simplify its operations, agreeing to sell its New Zealand life insurance business.
Regulatory approval was then being sought for Asteron Life to be sold to Resolution Life for $410m.
Resolution Life is a big Bermuda-based company which is focused on acquiring and managing life insurance portfolios and already has quite a bit of market share in New Zealand.
After an 18-month battle with the Reserve Bank of New Zealand (RBNZ) - insurance companies’ prudential regulator - Resolution Life was in 2020 given clearance to buy AMP’s life insurance book.
The RBNZ put a bunch of conditions around the A$3b sale to protect the 200,000-odd AMP Life policyholders. It was wary that Resolution Life wanted to use a “run-off” model - make money by managing existing policies, rather than selling new ones.
Fifth largest: $395m agricultural deal
New York Stock Exchange-listed Swiss global agribusiness and food company Bunge Global SA bought all the shares in Viterra, 50% owned by Canadians and 50% by Channel Islands interests.
Viterra is a Netherlands-headquartered agribusiness company. Its business includes the origination, storage, handling, and marketing of commodity crops.
Bunge’s application needed consent because it involved significant business assets. New Zealand assets were involved in a wider global trade.
A Financial Times opinion piece, published in the Herald in June 2023 said: “The combination of United States-listed Bunge with Glencore-backed competitor Viterra, in an US$8.2b ($13.2b) deal, brings together two of the biggest traders of grains, oilseeds, and other agricultural commodities, further tightening the grip of a handful of low-profile companies on the global market”.
Consent was granted on January 31, 2024.
Sixth largest: $320m technology deal
Par Global Australia (90% Australian) won consent to buy ASX-listed Task Group Holding (73% Australian).
Par Global Australia is ultimately owned by Par Technology Corporation, listed on the New York Stock Exchange.
It provides cloud-based software and hardware for the restaurant and retail industries, the OIO said.
Task is an Australian company which develops software for hospitality services.
Par Global intends to expand, absorb Task’s cashflow profile and bring global brands who work with Task into its portfolio, the decision said.
Task was previously listed on the NZX as the mobile engagement company Plexure.
Consent was granted for the latest deal because Par Global met the investor test criterion, the OIO said.
May 24, 2024, was the decision date.
Seventh largest: $320m health software deal
Lunit Inc (85% South Korean), won consent to buy all the shares in New Zealand’s Volpara Health Technologies owned by Health Technologies.
Lunit develops and manufactures artificial intelligence-enabled cancer and disease detection software and devices used at more than 2000 sites globally.
It bought the shares under a scheme of arrangement.
Kiwi business Volpara develops software and imaging products for early detection of breast and lung cancer, the OIO noted.
Consent was granted as the applicant met the investor test criterion.
Herald technology editor Chris Keall reported two years ago Volpara chief executive Teri Thomas saying its measure of breast density - an accepted cancer risk measure in the United States and Europe - would help identify those at risk overall. It would help prioritise at a time when BreastScreen Aotearoa had a backlog of some 30,000 mammograms to reach pre-Covid levels.
Eighth largest: at least $267m for leasehold land deal
Foresta Group Holdings (70% Australian) won consent to buy a leasehold interest in 10ha on State Highway 34, Kawerau, to establish a biofuel plant.
Foresta is an ASX-listed business that has manufactured biofuel in that country. It has a market capitalisation of A$23m.
The land is used for grazing and as a dairy farm, the OIO noted.
Foresta will develop and operate a plant to produce biofuel from pine, making up to 690 tonnes of processed wood pellets and 150 tonnes of biochemicals a day, the OIO said.
“The main benefits to New Zealand are likely to include significant capital investment and export receipts and the creation of jobs in a district experiencing high unemployment.”
In April, it was reported the business planned to invest $300m in building the plant which, at full production, would employ more than 100 people.
“There’s a huge opportunity in New Zealand for our world-leading low emissions technology and today we’ve taken a major step forward in our plans,” Foresta chairman Henry Cheng said.
The plant would produce “unique low-impact torrefied wood pellets”.
Consent was granted on July 8, 2024.
Ninth largest: $264m deal for trust to internalise management
NZX-listed Goodman Property Trust won consent to buy management from ASX-listed associate Goodman Group (46% Australian).
“The unit holders wish to internalise the management of Goodman Property Trust. The transaction is intended to structurally replicate an NZX-listed unit trust structure from a control perspective. Consent was granted as the applicant met the investor test criterion,” the OIO said.
In February, the Herald reported how Goodman Group also planned to increase its ownership of the trust from 25% to just under 31.8%.
The trust also expects to use Goodman Group’s global investor relationships to secure further third-party capital, it said.
It envisages a new $2b vehicle after three to five years. That business would invest in data centres.
James Spence, the trust’s chief executive told the Herald: “[Investment in] data centres is a big deal around the world, but not in New Zealand. Characteristics of data centres are not too dissimilar from logistics buildings.”
The trust had 50ha of development sites in South Auckland, “and that’s something we’re actively investigating, whether data centres are good for us. Demand for them is massive,” he said.
Tenth largest: $238m finance deal
UDC Finance (77% Japanese, 12% American) is a non-bank lending institution which is 100% owned by Japanese company, SBI Shinsei Bank.
In this country, UDC provides finance for plant, vehicles, and equipment.
It got consent to buy the structured finance portfolio of BOQ Finance (NZ) and BOQ Equipment Finance.
The OIO said the deal was “considered an organic expansion of the applicant’s existing financing business in New Zealand”.
That deal won consent on January 18, 2024.
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.
“We just knew it would be impossible to find anything else like that in Auckland."