Foreign investment in Aotearoa/New Zealand

Overseas Investment Office – June 2013 Decisions

Aussie-Controlled Ingham Poultry Changes Hands

A quiet month at the OIO. In further restructuring of the poultry industry (in May it was Tegel), Adams Bidco Pty Ltd, an Australian incorporated company owned by three entities ultimately controlled by TPG, received approval for the acquisition of rights or interests in up to 100% of the shares of Ingham Enterprises Pty Limited which indirectly owns or controls:

a freehold interest in approximately 8.4 hectares of land at 2 and 16 Banks Road and 7473 and 7481 Hinuera Road, Matamata, Waikato;
a freehold interest in approximately 24.3 hectares of land at 111 Pohlen Road, Matamata, Waikato;
a freehold interest in approximately 20.2 hectares of land at 25 Okauia Springs Road, Matamata, Waikato;
a freehold interest in approximately 67.2 hectares of land at 903 Leslie Road, Putaruru;
a freehold interest in approximately 62.6 hectares of land at 612 and 668 Waikehau Road, Waitoa, Waikato; and
a leasehold interest in approximately 9.3 hectares of land at 23 Dunlop Road, Waharoa, Waikato.

Approval was also received for an overseas investment in significant business assets, being the Applicant’s acquisition of rights or interests in up to 100% of the shares of Ingham Enterprises Pty Limited, the value of the securities and consideration provided, and the value of the assets of Ingham Enterprises Pty Limited and its 25% or more subsidiaries, including property in New Zealand used in carrying on business in New Zealand, being greater than $100m. The vendor was Robert Walter Ingham Australia (100%); consideration was confidential.

The OIO states: “The Applicant is an Australian company ultimately controlled by TPG and indirectly owned by investment funds affiliated with TPG (passive investors). The Applicant is acquiring all of the shares of Ingham Enterprises Pty Limited (‘Ingham’), an Australian privately-owned poultry and stockfeed supplier. The Applicant intends to utilise its existing trading relationships, expertise and capital to improve Ingham’s business and develop export opportunities it has identified.”

Jazial Crossley (12/3/13), reports briefly on the deal:

Family-owned chicken company Inghams has been sold to a private equity firm. The 95-year-old business, which was advertised for sale in July 2012, was sold to TPG Capital for about $A880 million. The sole shareholder was the grandson of its Sydney founder, Bob Ingham. The poultry company’s sale includes factories, farms and a distribution network throughout New Zealand and Australia. It has been operating in New Zealand since 1990 when it bought out Harvey Farms. With a head office in Waikato, it has one hatchery, three processing plants, two feedmills and other parent farms and contract broiler farms.

There are 1,043 employed at its New Zealand operations, for which turnover was $336m last year and $320m in 2011. In total there are around 8,000 people on the Ingham’s payroll including Australia with total turnover for 2012 $A2.2 billion. Inghams Enterprises Director of Group Services John Hexton said that TPG would need to answer how the sale would affect the NZ Ingham’s operations. The company’s forecast earnings for the 2013 year is around $A210m. TPG Capital has more than $US54b under management across retail, consumer products, healthcare, financial services and other sectors. It has offices in Melbourne, Tokyo, Mumbai, London, the United States and Europe”. See our December 1995, July 1997, September 1998 and March 1999 commentaries for details of land purchases here by Ingham. See our July 2010 commentary for details of TPG’s last significant purchase here, Healthscope

Canadians Buy Taipoi Forest

Forest Securities Limited, Estate of Willi E Roth, Canada (100%), received approval for the acquisition of a freehold interest in approximately 486 hectares of land known as Taipoi I and II Forest and located adjacent to the Tinui Valley Road, Wairarapa. The vendor was PKF Martin Jarvie Trustees Limited, New Zealand (100%); consideration was $937,500 or under $2000 per hectare. The OIO states: “The Applicant intends to acquire the land as a forestry investment for the production of timber”. Prior to his death, Roth had been an active purchaser of forestry land here. See our commentaries for April (1997, 1998 and 1999), May 2001 and August 2002 for details.

James Cameron Gradually Acquiring A Titanic Wairarapa Land Holding

It seems James Cameron loves the Wairarapa. T Base 2 Limited James F Cameron, Canada (100%), received approval for the acquisition of a freehold interest in approximately 420.6 hectares of land at Western Lake Road, South Wairarapa. The vendor was Peveral Industries Limited and Macland Farms Limited New Zealand (100%); consideration was confidential. In what is becoming a repetitive OIO mantra for this frequent applicant, the OIO simply states: “James F Cameron and his family intend to reside indefinitely in New Zealand. They are acquiring the land as part of a larger acquisition of land in South Wairarapa which they will use as a residence and working farm”.

This latest decision followed the purchase in May of a walnut orchard in Carterton and another ten hectare property on Western Lake Road. In a buying spree over the last few years, the Canadian-born director – who has helmed some of the most lucrative films in cinema history – paid about $20 million for an 817ha Pounui property and a 250ha dairy farm in January 2012. Later in 2012 he added a ten ha lifestyle block, two further lifestyle blocks and a 13ha site containing several buildings – all in the South Wairarapa district. This brings his total Wairarapa holdings to over 1,500 hectares.

Other June Decisions

DB Breweries Limited, Heineken International BV, Netherlands (100%), received approval for the acquisition of a leasehold interest in approximately 1.3 hectares of land at the corner of Glenfield Road and Downing Street, Glenfield (“the Land”). The vendor was Hospitality Assets Limited (in receivership), Alfred Ernest Wallis, New Zealand (50%) and Ian Garnett Shaw, New Zealand (50%); consideration was confidential The OIO states: “The Applicant has leased the land to develop and operate a new gastro bar named The Postman’s Leg. The Applicant will manage the Investment through its 60% shareholding in Barworks Group Limited (‘Barworks’).The Investment will further advance Barworks’ goal of being New Zealand’s leading hospitality company in terms of quality and profitability”. See our October 2012 commentary for details of Heineken’s purchase of DB Breweries.

Zhi Qiang Liu & Helen Chu Lee, Australia (100%), received approval to buy a freehold interest in approximately 10.1 hectares of land at 67E Purangi Road, Hot Water Beach, Whitianga. The vendor was Whenuanui Farm Limited New Zealand (100%); the price $950,000. The OIO states: “The Applicants who intend to migrate to New Zealand and become New Zealand residents are acquiring the property to use as their primary residence”.

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