Foreign investment in Aotearoa/New Zealand
Overseas Investment Office – July 2016 Decisions
Aussies Reshuffle Property Portfolio
In a large property transaction structured in two stages, Diversified NZ Property Trust, Victorian Superannuation Fund, Australia (49.8%), Health Employees Superannuation Trust Australia, Australia (47.9%), New Zealand public (2.2%) and various overseas persons (0.1%), received approval for the acquisition of property in New Zealand used in carrying on business in New Zealand (the Initial Property Assets) for consideration exceeding $100m (the Initial Property Acquisition); and an overseas investment in significant business assets, being the Applicant’s acquisition of additional property in New Zealand used in carrying on business in New Zealand (the Further Property Assets) for consideration exceeding $100m (the Further Property Acquisition) – (together the Investment).
The vendor of the initial transaction was the applicant themselves, the vendor of the second transaction was Scentre Group, Australian public (99.3%) and New Zealand public (0.7%). Consideration was stated for the initial property acquisition at $100,235,000 and the further property acquisition at $445,000,000 The OIO states: “The Applicant is an Australian unit trust. The Investment involves the acquisition by the Applicant of two portfolios of commercial property assets, neither of which are ‘Sensitive Land’ under the Act. The Initial Property Acquisition involves the transfer of the Initial Property Assets into the ownership of a new investment vehicle with ultimate ownership remaining the same. The Further Property Acquisition involves the acquisition of another group of properties by the Applicant to expand its property investment portfolio”.
Dell Acquires EMC In Big Data Move
Denali, Dell and MergeCo, Michael Dell and the Susan Lieberman Dell Separate Property Trust, United States of America (70%), various funds and affiliates of Silver Lake Group LLC, a United States incorporated private equity fund manager (24%), MSD Partners, LP, United States of America (4%) and various US investors, United States of America (1%) received approval for an overseas investment in significant business assets, being Denali Holding Inc. (Denali), Dell Inc. (Dell), and Universal Acquisition Co. (MergeCo) (together, the Applicants) and their acquisition of: an indirect interest in up to 100% of the shares of EMC New Zealand Corporation Limited (“EMC NZ”); and an indirect interest in up to 81% of the shares in VMWare Inc. (VMWare), which holds an indirect interest in 100% of the shares of VMWare NZ Company (“VMWare NZ”), by means of MergeCo’s merger (the Merger) with EMC Corporation (EMC), which is the controlling shareholder of EMC NZ and VMWare, (the Investment).
The vendor was EMC, United States public (82.6%), various overseas persons (4.8%), United Kingdom public (3.9%), Swedish public (1.9%), Canada public (1.6%), Japanese public (1.5%), Swiss public (1.5%), Luxembourg public (1.1%) and Norway public (1.1%): asset value was stated as NZD$215,590,143 The OIO states: “Dell is an American privately owned computer technology company, which develops, sells, repairs and supports products and services related to computers”.
“Dell, Denali (Dell’s parent company) and MergeCo (a special purpose vehicle company) are party to an agreement with EMC to effect the Merger. Through the Merger, Dell will effectively acquire EMC, while maintaining VMware as a publicly-traded company. EMC has a New Zealand subsidiary; its business interests include products and services relating to cloud computing, data storage, IT security and big data”. This deal is part of a global US$74 billion merger.
Tegel Expands In New Plymouth
Tegel Foods Limited, New Zealand public (31.1%), United States public (23.3%), Australian public (18.5%), various overseas persons (12.1%), Singapore public (3.8%), Dutch public (2.7%), Cayman Islands public (2.5%), United Kingdom public (2.4%), Federal Republic of Germany, Germany (2%) and Canada public (1.6%), received approval for the acquisition of a leasehold interest, in approximately 2.5 hectares of land at 182 Bristol Road, Inglewood, New Plymouth (New Leasehold Interest), for a term of three years or more (the Investment).
The vendor was Ngatoro Poultry Limited, Robert Billing, New Zealand (25%), Neville Hagensen, New Zealand (25%), Marcus Gawler and Cecilia Gawler, New Zealand (25%) and Werner Thony, New Zealand (25%): consideration was $21,131,145. The OIO states: “The Consent Holder is a poultry producer involved in the breeding, hatching, growing, and processing of chicken and turkey for the New Zealand market and export markets. The Consent Holder is acquiring the New Leasehold Interest to increase its production capacity in New Plymouth. The acquisition of the New Leasehold Interest is expected to result in the creation of new jobs and increased annual export receipts. In addition, the Consent Holder’s parent company is an NZX-listed firm, so New Zealanders will have the opportunity to participate in the Investment”.
Fletcher Building Buys Higgins Group
Fletcher Building Holdings New Zealand Limited, New Zealand public (27.5%), various overseas persons (21.9%), Australian public (19.6%), North American public (15.6%), European public (11.4%) and Asian public (4%), received approval for an overseas investment in sensitive land, being the Applicant’s acquisition of rights or interests in 100% of the shares of Higgins Group Holdings Limited which owns or controls:
- a freehold interest in approximately (subject to subdivision) 333ha of sensitive land; and
- a leasehold interest in approximately 153ha of sensitive land.
Approval was also received for an overseas investment in significant business assets, being the Applicant’s acquisition of 100% of the shares of Higgins Group Holdings Limited for consideration exceeding $100 million. The vendors were the existing shareholders of Higgins Group Holdings Limited, New Zealand (100%): consideration was $262,000,000. The OIO simply states: “The Applicant intends to incorporate the Higgins Group Holdings Limited business into its existing New Zealand operations in order to improve its road construction and maintenance resources”.
Fiona Rotheram in the NBR (2/2/16) reports on the deal. “Fletcher Building (NZX: FBU) has paid $315 million for Higgins Group Holdings, New Zealand’s third largest road construction and maintenance company, while separately announcing it will restructure into five divisions. The Higgins deal involves its road construction and maintenance operations in New Zealand, including asphalt and bitumen plants, road construction and maintenance operations in Fiji, aggregate business including 16 operational quarries, and other related businesses including the manufacture of traffic signs and bitumen tanks and sprayers. Excluded from the deal are Higgins’ ready-mix concrete and property businesses”.
“Fletcher Building Chief Executive, Mark Adamson, said he had signalled for some time a desire to expand into road construction and maintenance, which the company sees as a significant opportunity. Higgins was an obvious choice, he said, as Fletcher had already partnered with it on road construction projects for the past 25 years. Higgins recorded $391 million in revenue and underlying operating earnings of $35 million in the 2015 financial year and is expected to generate earnings before interest and tax of $40 million in 2016. The acquisition is being funded from existing cash and debt facilities and is conditional on a number of factors including Overseas Investment Office and Commerce Commission approval”.
“Last week Fletcher announced it had OIO approval for its sale of Rocla Quarry Products to Hanson Construction for a post-tax profit of $85 million which will be booked in the 2016 financial year. Fletcher said changes to its business portfolio, including the purchase of Higgins and sale of Rocla, required a new structure, which will see the business organised into five divisions….” Commerce Commission approval was received in July after dropped its application to buy Horokiwi Quarries as part of the deal.
Turners And Growers To Plant Another Apple Orchard
T&G Global Limited, Federal Republic of Germany, Germany (73.1%), New Zealand public (26.8%) and various overseas persons (0.1%), received approval for an overseas investment in sensitive land, being the Applicant’s subsidiary’s (Apollo Apples [2014] Limited) acquisition of a leasehold interest in 13.5 hectares of land at 100 Moteo Pa Road, Puketapu, Hawkes Bay. The vendor was Gerard Francis Moughan and Christopher John Moughan as trustees of the Bay Trust (Lessor), New Zealand (100%): consideration was “withheld under section 9(2)(b)(ii) of the Official Information Act”.
The OIO states: “Apollo Apples (2014) Limited, a 100% subsidiary of T&G Global Limited, intends to acquire the leased land in Hawkes Bay to develop an orchard. The land has previously been used for cropping, but is suited for development into an apple orchard. We are satisfied the Investment is likely to create job opportunities, as well as increased export receipts for New Zealand exporters and royalties for the Crown Research Institute”. See our March 2012 commentary for details of the Germans’ original purchase of Turners and Growers and our November 2014, October 2015 and April 2016 commentaries for details of T&G Global’s other purchases here.
New Aussie Operator For Motutere Bay Holiday Park
Trans Tasman Holiday Parks Limited John Denis Tilton, Australia (97.5%) and Napadsakon Tilton, Australia (2.5%), received approval for the acquisition of a leasehold interest in approximately 27.1 hectares of land at 2891 State Highway 1, Turangi. The vendor was Motutere Family Trust Brent Anthony McIntosh and family, New Zealand (100%): consideration was $849,339.
The OIO states: “The Applicant is acquiring the Motutere Bay Holiday Park (the Park), on Lake Taupo, which lies on sensitive land leased from the Taupō District Council. The Applicant will invest significant capital in upgrading and expanding the Park’s facilities and will also improve marketing. Together, the Applicant anticipates that these initiatives will result in significant increases in occupancy, revenue and overall profitability. The Investment will also result in improved walking access along the foreshore of Lake Taupo”.
Other July Decisions
Christopher Campbell Taylor, Australia (100%), received approval for the acquisition of a freehold interest in 14.4 hectares of land at 161 Maitai Valley Road, Nelson. The vendor was Dennis Michael Pinna and Sky Madhuri Landis, New Zealand (100%): consideration was $925,000. Taylor is intending to migrate to New Zealand.
Carl Petri Ploetner & Alexandre Nicolas Krylov-Ploetner, Germany (50%) & Switzerland (50%), received approval for the acquisition of a freehold interest in approximately 0.4 hectares of land at 79A Trig Road, Onetangi, Waiheke Island. The vendor was Lynda Anne Eadie & Stewart Marshall Eadie, New Zealand (100%): consideration was $2,200,000. The Applicants have migrated to New Zealand and plan to reside in New Zealand indefinitely.
Apres Demain Limited, Hermine Yuki Mauvernay, Switzerland (100%), received approval for the acquisition of:
- a leasehold interest in 11.3 hectares of land at Paddock Bay, West Wanaka Road, Otago; and
- a freehold interest in 203.7 hectares of land at Paddock Bay, West Wanaka Road, Otago.
The vendor was Riverside Company Limited, New Zealand (100%): consideration was $8 million. The Applicant has migrated to New Zealand and plans to reside in New Zealand indefinitely.
Repercussions From July 2016 Decision
New Aussie Operator For Motutere Bay Holiday Park
Campaign Against Foreign Control of Aotearoa,
P.O. Box 2258
Christchurch.