Farmer shareholders agreed to the sale of the 82-year old dairy co-operative at a special shareholder meeting in Greymouth this month.
Ninety-three percent voted in favour of the sale to Yili for $588 million.
The sale needed OIO consent because Yili is buying sensitive land (4.8 hectares of residential land) and significant business assets (worth more than $100 million).
The residential land is currently used for factory worker accommodation at Westland’s two processing plants in Hokitika and near Christchurch, and as a noise buffer between the plants and their neighbours.
The OIO said it approved the application because it met all the tests required under the Overseas Investment Act.
These are:
-The investor test, which means the directors of Yili demonstrated business experience, good character and business acumen.
-The incidental and non-residential use of land test, which means the land will continue to be used in the ways it is currently used – as noise buffer space and as accommodation for factory workers to support the business.
Land Information New Zealand Group Manager, Overseas Investment Office, Vanessa Horne said the law is clear and that Yili met all the requirements needed to buy Westland.
She said Yili provided extra information the OIO requested during the assessment.
“It’s important to remember that the tests for this investment are quite narrow. Yili is not buying rural land, which involves very different tests for investors,” she said.
“The benefit to New Zealand test doesn’t apply to this investment because it doesn’t involve rural land,” said Horne.
Former Westland shareholders sent a submission to the OIO asking for the Yili application to be put on hold until they received payment for the shares they surrendered when they left the co-operative.
“This is a commercial issue for the former shareholders to resolve with the new Westland owners.”
“The law is straightforward about what the OIO can take into account when assessing applications, and these sorts of issues fall outside it.
Yili’s purchase still requires approval at a High Court hearing, set for 18 July 2019.
