Westland and Yili last night signed a conditional agreement that will see Inner Mongolia Yili Industrial Group Co Ltd offer to buy 100% of the company for $588 million.
The deal follows a lengthy competitive process run by Westland.
Yili chief executive Jianqiu Zhang says the offer, if accepted by shareholders, would result in an immediate cash windfall to farmer shareholders, as well as a competitive milk payout.
Westland and Yili would also be able to share the expertise each entity has developed over many years in the industry, which will lead to increased innovation, Zhang said.
“The Yili Group sees our offer to Westland farmer shareholders as very much a partnership arrangement,” he said.
“We believe we are offering farmer shareholders a stronger financial future, and greater access to international markets. In return, we are asking to become the custodians of one of New Zealand’s most trusted brands – Westland Milk – with all the knowledge, history and expertise that comes along with that.”
Zhang said Yili had already demonstrated its commitment to local dairy farmers and its determination to be a good corporate partner with New Zealand dairy farmers.
“At our Oceania processing plant at Glenavy, we have increased the average price to local dairy farmers because we believe that supporting our farmers and their families is the best way to achieve our business goals.
“This proven track record is what Westland farmer shareholders and suppliers can expect from us if they accept our offer.
“Yili believes it has made the best offer to farmer shareholders, and has backed that up by offering a very competitive milk payout.
“We are very hopeful that the farmer shareholders will support our offer, and that we can work together for a strong and secure future for Westland Milk.”