March 1998 decisions

March 1998 decisions

Suez Lyonnaise Des Eaux of France buys Waste Care from Browning-Ferris

SITA S.A., a public company of France, 63% owned by Suez Lyonnaise Des Eaux, has approval to acquire Waste Care Ltd from Browning-Ferris Industries Asia Pacific Inc of the U.S.A. for US$45 million. Browning-Ferris Industries Asia Pacific Inc is a subsidiary of the second largest U.S. waste company, Browning-Ferris, based in Houston, Texas. “The acquisition forms part of a world-wide merger by SITA of all the waste businesses of BFI, excluding their business operations in the U.S.A., Canada and Mexico.”

Lyonnaise des Eaux is one of the largest transnational utilities companies in the world, one of a small number of huge companies that are expanding aggressively, feeding on the wave of privatisations. It is one of the two biggest water companies, for example, alongside Compagnie Generale des Eaux Societe Anomyne (CGE), also of France. In 1997 Lyonnaise merged with its largest shareholder, Compagnie de Suez, to make Suez Lyonnaise des Eaux. Compagnie de Suez is the former owner of the Indosuez Bank and is descended from the company that built the Suez canal, (ref http://www.suez-lyonnaise-eaux.fr/english/group/index.htm).

Suez Lyonnaise has modest aims: merely to be the largest owner of public utilities in the world. As its World Wide Web site states:

“Suez Lyonnaise des Eaux, issue of the merger between Compagnie de Suez and Lyonnaise des Eaux, has chosen to focus its development around businesses which are the heart of mankind’s essential needs : energy, water, waste services, communications.

The Group’s goal has been clearly stated: become world leader in private infrastructure services.

To achieve this goal, Suez Lyonnaise des Eaux will rely upon a number of competitive advantages. The expertise and motivation of the 175,000 people on our team; the values and cultures which come from companies which are over a century old; the mastery of the most-up-to-date techniques; a strong Franco-Belgian base coupled with proven international successes; the means to finance major projects in rapidly developing markets – markets which are growing due to urbanization, deregulation and privatization.

Suez Lyonnaise des Eaux is present in more than 120 countries. Its international dimension has become the Group’s “new frontier”.

It is an industrial Group committed to service – because the companies which win are those which put the customer first. This is how Suez Lyonnaise des Eaux respond to the ever-more demanding requests from governments, local officials, our consumers and from our industrial clients in France and Belgium, but elsewhere around the world from Chile to Kazakhstan, Ireland to Thailand – and in cities such as Buenos Aires, Casablanca, Sydney, Manila and Jakarta.”

Its own publicity shows it active in everything from waste disposal and road building to cable and digital satellite TV. It is the “leading cable operator in France”. Of its 175,000 employees in 120 countries, it boasts 105,000 (and 70% of revenues) are outside France. It has major investments in China.

It positively drools over coming environmental problems and deregulation: (their emphases)

“The environment, a major market

• Considerable needs for equipment and urban services in emerging countries:
  • In 2015, 33 towns with over 10 million inhabitants
  • 22 emerging countries without water and power distribution systems
• A general trend towards deregulation of public monopolies
• A climate favourable to private management of public services, strengthened by the abundant financing available
• A competitive situation undergoing great change“

Its subsidiary, SITA, took over the Browning-Ferris companies in February:

“On 16 February 1998, SITA announced finalisation of its acquisition of Browning-Ferris Industries’ activities outside North America, making it European leader in waste management, with 1997 pro forma turnover of FF17bn. It is active in 10 European countries and has significant positions in Asia and the Pacific as well as in Latin America.” (http://www.suez-lyonnaise-eaux.fr/english/entre/infos/cpf/cp80.htm)

Previous to this it had been active in Europe (where the European Commission forced it to sell Belgian subsidiaries because of competition concerns) and the U.K. In the U.K. for example, it is involved in public sector cleaning, environmental, and ground maintenance services, alongside another Lyonnaise subsidiary acquired in 1996, Northumbrian Water, a beneficiary of water privatisation in the country.

Like many of Lyonnaise’s major competitors, however, its “values and cultures” and its “commitment to service” can take an interesting turn. Public Services International (PSI), which represents 20 million workers in public services around the world, has investigated these companies in considerable depth through its Public Services Privatisation Research Unit (PSPRU) in London.

PSI reported in 1997:

Since June 1994, French magistrates have been investigating numerous allegations of corruption used by large companies to win public sector contracts. Executives of both Lyonnaise des Eaux and Generale des Eaux have been convicted of corruption, and further cases are pending. In mid-1996, no less than five out of 13 directors on the main board of Generale des Eaux were under investigation for corruption (mostly in connection with their jobs with other companies). Similar allegations and convictions of bribery and corruption have occurred elsewhere in the world, and not only with the French companies.

Lyonnaise was for example prosecuted for bribing the former mayor and associates of Grenoble, France, to the value of 21 million francs, in order to get the local water concession. The contract, according to the city’s lawyer, had led to high prices and hurt both the city’s finances and image. Water prices had risen three-fold in the six years to 1995 since privatisation, and the city was considering reclaiming ownership of the water supply. (“The Privatisation Network”, PSPRU, January 1996, p.1, 22, 27.)

The company’s commitment to public service can also be judged. In St Etienne, France, where the local council brought in Lyonnaise and rival CGE in 1990 to run the water supply, prices rose from 3.52 francs in 1990 to 8.50 francs in 1996. According to a French parliamentary report, twenty years ago, French citizens paid 20-30% more for privatised water than did those who had access to municipally-run services. By 1988 that difference had soared to 58%. (PSI Focus No. 2, June 1995, pp 4-7; The CCPA Monitor, April 1997, “The Problems with Privatising Water”, by Jan-Willem Goudriaan and David Hall.)

According to PSPRU (op. cit., page 12), the waste treatment market in France is almost completely controlled by three operators: CGE, Lyonnaise and a third company, Tredi. In September 1994, L’Usine Nouvelle reported that “Many companies are complaining that lack of competition between industrial waste processors is leading to artificially high prices for waste processing services.”

The OIC, in approving the takeover, states:

“The Commission is further advised the persons who exercise control over SITA are of good character and not the kind of persons referred to in 7(1) of the Immigration Act 1987.”

You be the judge.

And lest you, dear reader, mourn the passing of Browning-Ferris as owner of Waste Care, consider these further examples from PSPRU (op. cit., page 12, quoting Citizens Clearinghouse for Hazardous Waste, U.S.A., 1995):

“In 1980, WMX [Waste Management, now merged with U.S.A. Waste to become the biggest trash company in the U.S.A. – see Foreign Control Watchdog, numbers 86 and 87] was indicted in Atlanta for engaging in price fixing with Browning-Ferris Industries (BFI) and SCA Services. In 1984 the company was convicted…

One of the most important cases to date was a civil class-action suit filed in 1987 in Philadelphia, PA, alleging that WMX and the largest “competitor”, BFI, had engaged in a nationwide price fixing conspiracy for 10 years. In 1990, WMX and BFI settled, agreeing to pay the plaintiffs, a group of their customers, a total of $50 million in penalties (WMX paid $19.5 million, BFI paid $30.5 million) and split $13 million in attorneys fees. Both companies denied any wrongdoing but the evidence in the case clearly indicated that WMX and BFI officials in their respective corporate headquarters had not only condoned price fixing activities, but also directed and participated in the scams.”

Force Entertainment sold to Entertainment Property Trust of Australia

The Entertainment Property Trust (yet to be formed at the time of the OIC decision) has approval to acquire Force Entertainment Ltd. The Trust is to be administered by MTM Funds Management Ltd. The acquisition includes “approximately 0.392 hectares” known as the Force Entertainment Centre in Queen Street, Auckland, adjoining the Civic Theatre, which is registered under the Historic Places At 1993. The price is “between $50,000,000 and $75,000,000“.

“The Trust intends to contract with Force Corporation Limited and its associated New Zealand based companies for the acquisition of the share capital of Force Entertainment Limited, which is currently developing a large entertainment complex, on the land the subject of this application.”

As we reported in our commentary on the OIC’s February 1998 decisions, Force sold its half share in four Auckland multiplexes, which it will lease back, to Village Entertainment in March 1998 for $18 million. The sale was in order to finance this new entertainment centre. The centre includes 12 cinema screens and a 450-seat giant screen cinema, as well as other shops and entertainment. According to the Press, the Trust in this decision is the MTM Entertainment Trust, which plans to list on the Australian Stock Exchange with a public offer of A$80 million. Force Entertainment will also borrow $50 million, which will be guaranteed by Force Corporation, to complete the centre in April 1999 (Press, 29/5/98, “Force to sell centre shares”, p.30).

Carter Holt sells roofing, insulation and packaging moulded fibre divisions

In what appears to be a move out of value-added manufacturing activities, Carter Holt Harvey Ltd, owned 51% by International Paper Products of the U.S.A., is selling two of its manufacturing divisions.

Tasman Building Products Pty Ltd is buying Carter Holt’s roofing and insulation divisions. Tasman is owned 44.6% by a consortium of Australian financial institutions, including majority shareholder, AMP Custodian Service Pty Ltd, and by senior management of the divisions. The price has been suppressed, but the business hype has not been:

“Tasman state the acquisition will allow the businesses to be run as focused stand alone entities, unshackled from the distractions which inevitably come from being part of a large corporate group. Furthermore, it is stated this more focused structure can only serve to further improve the performance of the businesses and provide the creation of additional employment opportunities as the businesses are expanded.”

However, the Press reports the sale price was $172.4 million, compared to an asking price said to be $220 million. NZPA lists the shareholders of Tasman as including co-leaders AMP Asset Management and Grant Samuel Private Equity of Australia, and also Direct Capital Partners, of Auckland. It lists the businesses sold as including not only roofing and insulation in Aotearoa, but insulation, sinkware and flooring operations in Australia, and roofing in California as well. Tasman will employ 830 staff and have sales of more than $240 million year, 65% of the sales being overseas (Press, 1/4/98, “CHH sells building companies”, p.30; 11/4/98, “CHH division sold”, p.23).

Van Leer New Zealand Ltd is buying Carter Holt’s packaging moulded fibre division. Van Leer New Zealand is owned in the Netherlands: 50% by the Van Leer Group Foundation and 50% in public shareholdings. Again, the price has been suppressed. “It is stated the Van Leer group is one of the world’s leading packaging companies with operations in 43 countries world-wide.”

The strategy behind the sales was outlined by Carter Holt’s Chief Executive, John Faraci, in March 1997 when he told a New Zealand Investment Conference in Auckland that the company was undergoing a “major reorientation of the company’s operations from a manufacturer and distributor, to a company focused on forestry, wood products, packaging, and building products”. The company was thus able to “capitalise on developing its world-class plantation forests, develop new products for niche markets, and increase its presence throughout the Asia-Pacific Rim.” The aim was vertical integration (Press, 13/3/97, “CHH positive on forestry sector”, p.32). Faraci confirmed this in August the same year when he announced Carter Holt was selling its insulation businesses (in Aotearoa and Australia), roof tile (in Aotearoa, U.S.A. and Europe), and metal sink and industrial floor businesses (in Australia). Although they were profitable, Carter Holt’s strategy was in other areas. The moves appeared to be at the direction of majority shareholder, International Paper Products (Press, 27/8/97, “IP hand on CHH sale bid”, p.26).

Despite problems with profitability, which have recently worsened with the Asian crisis, Carter Holt has continued to buy up new forests, although in January this year it put four North Island forests, totalling nearly 7,000 hectares, on the market (New Zealand Herald, 13/1/98, “Carter Holt seeks forest buyers”, p.D2). It also expanded its Levin packaging plant, in preparation for closing its Hastings plant (Press, 20/12/97, “CHH boost for Levin”, p.22) and bought up companies in Australia including Associated Plastics Industries; paper cup maker, Continental Cup Company Pty (in a joint venture with its parent, International Paper Products), including Continental’s distributing arm in Aotearoa; and the folding carton business of the U.S. company, Riverwood International Corporation, the second-largest supplier of such products in Australia (Press, 8/8/97, “Tough quarter for Carter Holt”, p.24; 18/2/98, “CHH to buy cup firm”, p.32; 14/3/98, “Carter Holt Harvey buy”, p.20).

However, in addition to the above two sales, Carter Holt has also sold its Walltruss frame and truss business to Hudson Investment Group of Australia, for an undisclosed price (Press, 28/5/98, “CHH business sold”, p.27).

International Paper is remodelling Carter Holt from a diversified manufacturer with forestry as its major business line, to a vertically integrated wood processor. Whether that is good for Aotearoa and the company’s employees remains to be seen. So far it has not been good for Carter Holt’s employees and minority shareholders.

Royal & Sun Alliance insurance takes over Norwich

In two decisions almost completely suppressed until released on appeal in July 1998, the Royal & Sun Alliance group of the U.K. has approval to acquire Norwich Union Life Insurance (NZ) Ltd and Norwich Union Investment Management (NZ) Ltd from Norwich Union Plc of the U.K. In both cases, the price was stated in the July release only as “in excess of $10,000,000” ($10,000,000 is the statutory minimum at which the OIC’s approval is required). However, in a further release in November 1998, the value of the two transactions was given as $153,621,466. The news media had already reported in March (e.g. Press, 10/3/98, “SunAlliance grows”, p.36) that the price was $153.4 million. The OIC states: “Royal & Sun Alliance state the proposed acquisition will provide the amalgamation of the insurance businesses of Norwich to that of its existing business in New Zealand”. According to the Press, the merged company in Aotearoa will be the fifth-biggest life insurer and have more than $1.5 billion under management.

Both the Norwich companies are owned through Norwich Union Financial Services (NZ) Ltd. The purchase is through Royal & Sun Alliance Life and Disability (NZ) Ltd, a subsidiary of RSA Overseas Holdings BV, of the Netherlands which is a subsidiary of Royal & Sun Alliance Insurance Group Plc of the U.K.

General Electric of the U.S.A. takes over Giltrap’s vehicle leasing business

In a decision originally almost completely suppressed but partially released in November 1998, General Electric Capital Corporation, a subsidiary of the General Electric Corporation of the U.S.A., has approval to acquire the motor vehicle leasing activities of Corporate Leases Ltd, a subsidiary of Giltrap Holdings Ltd of Auckland. The price is still suppressed.

“GEC through its various ‘fleet services’ subsidiaries operates motor vehicles fleet management and leasing businesses in the U.S., Europe, Canada, Mexico, Japan and Australia.”

Formus (U.S.A.) buys radio frequencies, plans wireless telecommunications

At last, a start-up instead of a takeover. Hinet Ltd, owned by Formus International Inc, a subsidiary of Formus Communications Inc of the U.S.A., has approval to commence business for “in excess of $10,000,000” as a telecommunications service provider. Formus “was established to explore and introduce new wireless technologies in the telecommunications industry in the United States and in selected international markets.” In February 1998, Formus spent $2,732,327 buying radio frequencies in the 26-28 gigahertz (GHz) band in the Ministry of Commerce tender of frequencies. NZPA reports that Formus won five of the six licences in the very high frequency (VHF) 26-29GHz bands, Clear Communications winning the sixth licence (for $808,000). Such frequencies are used for high speed data, video and voice communications up to 4km. Applications include Internet, pay television and telephone services. Formus claims they will be able to offer more than 25 times the speed currently available for data transfer and is eyeing up the corporate data communications market (Press, 11/2/98, “US group buys bands”, p.30; 14/4/98, “Formus plans test of fast-data link”, p.26).

Coin Acceptors, U.S.A., buys 60% of SmartMove, maker of cash-card readers

Coin Acceptors Inc, owned by Mr J. E. Thomas and his family of the U.S.A., has approval to acquire up to 60% of SmartMove (NZ) Ltd, “the shareholders of which are all New Zealand incorporated companies”. The price was originally suppressed but was released on appeal in July 1998: US$6 million. SmartMove designs readers for cash cards that will take a variety of types of cards – likely to be an essential piece of equipment, at least until such cards become standardised.

“Coinco is a privately owned manufacturer of coin acceptors, coin changers and control systems and other component parts for vending and amusement game industries. … SmartMove is focused on the requirements of the various emerging stored value card (SVC) schemes, designing multi-card capable devices, largely aimed at unattended point of sale applications. It is advised the rationale behind the acquisition is to enable SmartMove to fully develop the potential of its technology by:

1. aligning itself with a more substantial organisation carrying on a complementary business to that of its own; and
2. the injection of additional development capital into the existing business operations of SmartMove by Coinco.”

CPI Graphics of Australia takes over Scipa Graphics NZ of Switzerland

In a decision not originally released, and released on appeal in July 1998, CPI Graphics NZ Ltd, a subsidiary of Consolidated Paper Industries (Holdings) Ltd of Australia, has approval to acquire competitor Scipa Graphics New Zealand Ltd, a subsidiary of Scipa Holdings SA of Switzerland for $10,643,330.

Ameron International Corporation takes over Croda Lusteroid Paints

Ameron International Corporation of the U.S.A. has approval to carry on business in Aotearoa and buy out either Croda Lusteroid Paints Ltd or its assets for “in excess of $10,000,000“. Croda Lusteroid is a subsidiary of Croda International Plc of the U.K. which is selling this part of its business in the U.K., Australia and Aotearoa.

In December 1993 we reported that

“Manders Plc of the U.K. is buying Croda Polymers (NZ) Ltd, beneficially owned by Croda International Plc, for $12,000,000. Manders is buying shares and business assets of parts of the Croda Group world wide. Presumably as a preparation for this, Croda Polymers International Ltd, a subsidiary of U.K. firm, Croda International Plc, is buying out another Croda International subsidiary, Croda Lusteroid Paints Ltd. Croda deals mainly in products for the printing industry.”

Du Pont buys partner, Mitsubishi, out of Morrinsville peroxide plant

Du Pont (New Zealand) Ltd, a subsidiary of the giant chemical firm, E.I. Du Pont de Nemours & Company of the U.S.A., has approval to acquire the 25.7% of Du Pont Peroxide Ltd it does not already own, from Mitsubishi Gas Chemical Company Inc of Japan, for US$2,750,000. The company owns a hydrogen peroxide manufacturing plant on nine hectares of land in Walton Road, Morrinsville, Waikato. Apparently Mitsubishi was only a sleeping partner: “The proposal will see no change in the current business operation of Du Pont Peroxide as Mitsubishi’s interest has to date been at board level only”.

The plant was announced in 1990, when Du Pont set up Du Pont Peroxide in conjunction with Mitsubishi Gas Chemical Company and Eka Nobel AB (60%, 20%, 20%). The OIC said at the time: “The three joint venture participants are all large multinational chemical manufacturers with many years experience. With their combined technical expertise, advanced chemical manufacturing technologies will be applied in New Zealand.” It appears that the claims made for the latter two companies never came to reality.

Kiwi income Property buys remaining 50% of Northlands Mall, Christchurch

Kiwi Income Property Trust, which is 25% to 30% overseas owned, has approval to acquire “up to the remaining 50%” of Northlands Property Holdings Ltd it does not already own, for $22,500,000. Northlands Property Holdings is the “indirect owner” of the Northlands Mall in Christchurch. Kiwi Income Property Trust is managed by Kiwi Income Properties Ltd which is 50% controlled by FCMI Financial Corporation of Canada, and the remainder by New Zealand residents.

Further 1.95% of NZP Holdings to Shin Nippon Yakugyo, exchanged for debt

Shin Nippon Yakugyo Co. Ltd of Japan has approval to acquire a further 1.95% of NZP Holdings Ltd in exchange for debt. The transaction is valued at $80,000. NZP Holdings is 75.12% owned by “the staff and management” of New Zealand Pharmaceuticals Ltd, and 24.88% by Shin Nippon Yakugyo, who are described as the company’s “Japanese Agents”. However the New Zealand Companies Office registers the only shareholder as Richard Pelham Garland, Managing Director of New Zealand Pharmaceuticals. If the OIC is correct, the 1.95% shareholding makes NZP officially an overseas company, as Shin Nippon Yakugyo now owns over 25% of it. However, the company claims that the change “will have no effect on the day-to-day operation/management of NZP Holdings’ business operation, nor impact on the New Zealand control over the company”. The company owns 14 hectares of land in Eyre Road, Linton, Palmerston North.

New Zealand Pharmaceuticals is owned 100% by ICI New Zealand Ltd, according to its New Zealand Companies Office record. The company employs seventy full time production, technical, administration and marketing staff, according to its World Wide Web site (http://www.nzp.co.nz/nf1_4.htm). According to the company’s page on the World Wide Web site of BIOTENZ (a grouping of New Zealand providers of biotechnology and pharmaceutical products and services supported by Tradenz: ref http://www.biotenz.org.nz/members/pharmaceuticals.html), over 15 of these staff are scientists and technicians. The company researches and develops in conjunction with New Zealand universities and Crown Research Institutes, but “undertakes most of its own product development work in well resourced laboratories and pilot plants.” New Zealand Pharmaceuticals “is a manufacturer of bulk natural biochemicals which are extracted and purified from a range of biological raw products” including meat industry by-products, plant and marine raw materials. “Over 98% of New Zealand Pharmaceuticals’ products are exported to international pharmaceutical, healthfood, biotechnology and cosmetic markets. The company has agency representation in Japan, Korea, Europe, North and South America.”

FreshFoods of Singapore buys Unilever’s coffee business

FreshFoods Holdings Pte Ltd of Singapore has approval to acquire the coffee business of Unilever New Zealand Ltd of the U.K. for AU$25,900,000. The new owner hopes to sell Unilever’s New Zealand brands of coffee to South East Asia. The FreshFood group “has over 40 years experience and knowledge of the food and beverage industry”. It also “intends to continue to carry on the current business operations of Unilever’s coffee business” domestically.

Carglass of S. Africa buys Smith & Smith automotive glass from Pilkington

Carglass (NZ) Ltd, a subsidiary of Belron International N V, owned by South African Breweries Ltd of South Africa, has approval to acquire the retail automotive glass business of Smith and Smith Ltd, a subsidiary of Pilkington (New Zealand) Holdings Ltd, itself owned by Pilkington Plc of the U.K. The price has been suppressed. Pilkington

“wishes to concentrate on its core business of manufacturing and wholesaling automotive and flat glass and accordingly is looking to divest its interest in 9 of its 35 retail outlets. … Carglass views the acquisition as an ideal opportunity to expand its existing retail network (currently 12 outlets throughout New Zealand) to localities either where it currently does not have a retail outlet or where the existing outlets can be further developed.”

Pilkington is combining the building glass operations of Smith and Smith with its own glass products division to form Pilkington Building Products NZ. Some Smith and Smith branches will close – unions fearing the loss of up to 300 jobs. Staff were given first option on buying 28 of Pilkington’s 46 Smith and Smith Glass outlets, according to NZPA. The Commerce Commission had no concerns about the move. (Press, 2/3/98, “Smith Glass sold to Carglass NZ”, p.27; 9/3/98, “Union fears job losses”, p.29; 14/3/98, “Carglass deal cleared”, p.20.)

According to Hoover’s Company Information, South African Breweries is supplier of 98% of the South Africa’s beer. In the year ended March 1997 the Johannesburg-based company had a turnover of R36,939 million, assets of R23,942 million, and 105,000 employees.

“Sales of the brewer’s 14 brands, including locally-based brands Castle Lager and Lion Lager and licensed European brands Heineken, Guinness, and Amstel, account for 70% of its earnings. The company is expanding internationally, with interests in breweries in central Europe, Africa, and Asia (it owns half of China’s 2nd-largest beer maker). It also owns 5 retail chains with 1,500 stores, 65 hotels (Holiday Inn and Intercontinental), and makes items like automotive glass, footwear, razors, and matches. The company produces wine and fruit drinks, and bottles Coca-Cola and Schweppes in South Africa.” (http://www.pathfinder.com/money/hoovers/corpdirectoryplus/s/sbwry.html)

According to MBendi Information Services, South African Breweries is the fourth largest brewer in the world based on total output. It has operations and partnerships in Angola, Botswana, Tanzania, Zambia and Zimbabwe and has a 70% share in Mozambique’s state-owned brewery (http://mbendi.co.za/indy/fdbt/bvrgaf.htm). South African Breweries’ own World Wide Web site indicates rapid expansion, listing investments in Ethiopia, Kenya, Romania, Poland and a number of other African countries in the last two years.

The company has close links with the South African government. In August 1997, the company’s Group Chairman, Meyer Kahn, was seconded for two years to the South African Police Service (SAPS) as Chief Executive. The position was “a new civilian function calculated to direct and accelerate the conversion of SAPS into an effective law enforcement and crime prevention agency.” He was replaced during his absence by Cyril Ramaphosa (http://www.sab.co.za/news/media-015.html).

Pharmaceutical giants Roche and Boehringer Mannheim merge

Roche Products (New Zealand) Ltd, a subsidiary of Roche Finance Ltd of Switzerland, itself owned by Roche Holdings Ltd of Switzerland, has approval to acquire Boehringer Mannheim New Zealand Ltd for US$19,606,620. Boehringer is owned by Corange International Holding BV of the Netherlands, but that company is conveniently owned by Bermuda-based Corange Ltd, presumably for tax purposes. The deal includes one and a half hectares of land at 15 Rakino Way, Mt Wellington, Auckland.

It is part of the world-wide takeover by Roche of Boehringer Manheim. As New Zealand Health Online reported (28/5/98, http://www.nzhealth.co.nz/maynews.html):

“Swiss pharmaceutical company Roche is following the trend by merging with Boehringer Mannheim in a deal valued at around $US11 billion which will make Roche the world’s largest manufacturer of diagnostic products and the sixth largest drug manufacturer. Last year, Sandoz and Ciba Geigy merged to become the world’s largest drug company, Novartis. In 1995 Pharmacia and Upjohn combined to become Pharmacia & Upjohn and Wellcome and Glaxo Holdings combined to become Glaxo Wellcome.

Merck biggest seller Merck and Co has re-established itself as the world’s leading pharmaceutical company in terms of sales, putting Glaxo Wellcome back to second place. Merck posted sales of $US13.3 billion against Glaxo Wellcome’s $13 billion. Third place of $9.8 billion went to Novartis, created through the Ciba Geigy and Sandoz merger last year.”

ICO of the U.S.A. takes over J.R. Courtenay (NZ) Ltd

ICO Inc, a publicly listed company based in Houston, Texas, U.S.A., has approval to acquire J.R. Courtenay (NZ) Ltd for $25,000,000. ICO’s press release (http://www.icoinc.com, 31/3/98) states:

“ICO, Inc. (NASDAQ-ICOC) today announced the acquisition of J.R. Courtenay (N.Z.) Limited and its wholly-owned subsidiary Courtenay Polymers Pty Limited. JR Courtenay, located in Auckland, New Zealand, and Courtenay Polymers, located in Melbourne, Australia, are the dominant providers of polymer powders to the rotational molding and metal coating industries in New Zealand and Australia, selling an extensive line of materials using proprietary formulations under their ‘Cotene’ brand name. The companies also provide a complete range of size reduction and compounding services.

The Courtenay Companies had combined revenues of approximately NZ$37,000,000 (US$21,000,000) in the fiscal year ended March 31, 1998 and were solidly profitable. The companies have grown as the rotational molding industry has grown in New Zealand and Australia. Although the terms of the transaction have not been disclosed, the acquisition was all cash and is expected to be immediately accretive to earnings. The acquisition provides ICO with its first facilities in the Australasian petrochemical processing markets. Exports currently account for only a small percentage of the Courtenay companies’ revenues, but their strategic locations provide an excellent base for expansion into Southeast Asia. Through the acquisitions of JR Courtenay, Verplast SPA in Italy, Rotec Chemicals Limited in the U.K., and the formation of ICO Polymers in France, Holland, England and Sweden, ICO has become a major global provider of polymer powders.

ICO, Inc. serves the global petrochemical, energy and steel industries by providing high technology equipment and services for petrochemical processing and oilfield services.”

ICO’s quarterly report to the U.S. Securities and Exchange Commission shows assets at 31/3/98 of US$331,460,000. Among a list of legal proceedings the company is involved in are “nine cases involving nine plaintiffs, for personal injury claims alleging exposure to silica resulting in silicosis-related disease” naming ICO as defendant. A number of such cases have been settled, including one for US$605,000.

Stanley Tan and Jeffrey Tang, both of Singapore, exchange 36 companies

Two businessman from Singapore who have extensive hotel and commercial property interests in Aotearoa are taking the unusual step of exchanging a large number of them. They are Mr Stanley Tan Poh Leng (who has New Zealand permanent residency status) and Mr Jeffrey Tang Boon Jek.

The companies Jeffrey Tang is giving to Stanley Tan are described as being engaged in “commercial property” and include four hectares of land adjoining the foreshore at Russell Township in the Bay of Islands, Northland:

Angliss (Russell) Investments Limited;

Angliss Auckland Investments Limited;

Angliss Avon Investments Limited;

Angliss Carpark Investments Limited;

Angliss Christchurch Investments Limited;

Angliss Heritage (Auckland) Developments Limited;

Angliss House Investments Limited;

Angliss Nominees Limited;

Angliss Property Group Limited;

NZL (Christchurch) Limited;

NZL Apartment Hotel (Auckland) Limited;

NZL Hamilton Limited;

NZL Holdings Limited;

NZL Investments (Wyndham) Limited;

NZL Land (Hamilton) Limited; and

Pacific Suisse Limited.

The companies Stanley Tan is giving to Jeffrey Tang are described as being engaged in “Hotel/Motel Accommodation” and include the Heritage Hotel, Queenstown, Otago, on 0.7663 hectares of land:

Citylife Holdings (Wellington) Limited;

Citylife Holdings Limited;

Dynasty Hotel Investments Limited;

Dynasty Hotel Management Limited;

Dynasty Pacific Group;

Dynasty Pacific Remuera Investments Limited;

Grand Pacific Developments Limited;

Heritage Tower Investments (Christchurch) Limited;

Home Comfort Inn Limited;

Morella Investments Limited;

New Zealand Land Limited;

Pacific Citylife (Christchurch) Limited;

Pacific Citylife Apartments Limited;

Pacific Leasing Limited;

Pacific Regency (Auckland) Limited;

Pacific Resorts (Queenstown) Limited;

Rourke Investments Limited;

Tang Tan Investments Limited; and

Xendra Enterprises Limited.

Swiss Lodge on Lake Rotorua

Swiss Lodge Ltd which is owned by Mr and Mrs Schweizer of Switzerland has approval to acquire “approximately 0.1163 hectares” adjoining Lake Rotorua, at 207 Kawaha Point Road, Rotorua for $370,000. “The proposal represents the acquisition of a residential property, together with an adjoining property located in Rotorua, for the purpose of developing the properties as an up-market tourist lodge.”

Land for forestry

• Carter Holt Harvey Ltd, approximately 51% owned by International Paper Products of the U.S.A., has approvals for three blocks of land for forestry:
  • approximately 1.031 hectares in Mangapapa Road, King Country is being purchased for $500 while approximately 1.23 hectares is being sold back to the vendors in order to “tidy up” boundaries;
  • forestry rights over approximately four hectares in Waiau, Gisborne are being acquired for ten cents annual rental, while at the same time the Carter Holt is granting the vendors a forestry right over approximately 14 hectares, also at ten cents per year. Both rights run until 31 December 2027;
  • forestry rights over approximately 23 hectares also in Waiau are being purchased from Port Gisborne Ltd for a “nominal rental” until 31 December 2008. Port Gisborne will receive 35% of the stumpage value at the time of harvesting.
• Rayonier New Zealand Ltd, a subsidiary of Rayonier Inc of the U.S.A., has approval to acquire 288 hectares of land known as “Etavale Forest” in the Wairaki Survey District, Southland from “Pears and Others” for a suppressed amount.

“Rayonier wish to acquire the property in order to expand its existing Southland forestry resource base. Part of the property (39 hectares) contains trees of an age class that will assist Rayonier to achieve a smoother age distinction over its Southland timber resource. Rayonier advise they intend to plant the unplanted area of the property (approximately 248 hectares) in Douglas Fir and Pinus Radiata.”

Other rural land sales

• Mintech (NZ) Ltd, a subsidiary of Pluess-Staufer AG of Switzerland, has approval to acquire 547 hectares of land in Tawarau Road, Waitomo District, Waikato from J.T. Were (Te Kumi) Ltd, for $1,000,000. The land is being acquired “in order to continue exploration work required for the extraction of limestone”, although part of it is held for conservation purposes. Mintech has a processing plant in Te Kuiti. The vendors will lease back 540 hectares (with perpetual right of renewal) to continue farming.
• More land is being bought for the Martha Hill gold mine at Waihi, Coromandel (the last was bought in August 1997). Waihi Gold Company Nominees Ltd of Australia has approval to acquire 0.2650 hectares at 44A Grey Street for $150,000 from N. D. Murphy. Waihi Gold Company Nominees Limited is owned 28.35% by Waihi Mines Limited, 28.35% by Welcome Gold Mines Limited, 27.84% by AUAG Resources Limited and 15.46% by Martha Mining Limited.

“Waihi Gold holds rural and urban land in around Waihi as trustee for the participants in the Waihi Gold Mining Joint Venture… The property is being acquired to assist in providing a buffer zone between the Martha Hill mine and existing residential areas and to enable the extension of the existing mining operation … The proposed extension of the mine will extend the life of the mine for (approximately) seven years and this will result in continued employment for the 135 people employed in the operation.”

• Morton Estate Wines Ltd of Canada has approval to acquire two pieces of land on the North Island’s East Coast: 17 hectares of land on State Highway 2, Katikati, Bay of Plenty, from K.D. and J.W. O’Connell for $850,000, to be used for a new warehouse; and 220 hectares in Omapere Road, Hastings, Hawkes Bay, for $800,000, to establish a new vineyard. Morton Estate Wines Ltd is trustee for the Morton Estate Wines Trust whose principal beneficiaries are John Mark Coney and members of his family, of Canada.
• Corbans Wines Ltd, owned by DB Group Ltd of Singapore and the Netherlands, has approval to acquire eight hectares of land in Rapaura Road, Blenheim, Marlborough, for $570,000 from R.V. and V.W. James. “Corbans wish to acquire the property in order to secure a supply of grapes for its wine business”, both domestically and internationally, and they propose to further develop the vineyard. DB Group is “approximately 58.39%” owned by Asia Pacific Breweries Ltd of Singapore, which itself is owned 80% by Heineken NV of the Netherlands, and Fraser Neave Ltd of Singapore.
• Negociants New Zealand Ltd, a subsidiary of Samuel Smith and Son Pty Ltd of Australia, has approval to acquire 23 hectares of land in Awatere Valley, Marlborough, which adjoins conservation land, for $779,500 from Awatere River Vineyard Pertnership. The land will be used for viticulture. Negociants previously bought Marlborough land in September 1992 (a one hectare vineyard on the corner of State Highway 6 and Blicks Road, Renwick, Marlborough for $118,000) and in June 1994 (a vineyard of seven hectares on State Highway 6, Renwick, Marlborough for $420,000).
• Wharfdale Farming Company Ltd, of Hong Kong, has approval to acquire 1,899 hectares of land in Lees Valley, Oxford, Canterbury for $675,000. It adjoins conservation land. The land will be used for sheep farming, in conjunction with Wharfdale’s other properties in the area. In June 1996 we reported that:

“A Hong Kong owned company, Wharfdale Farming Co. Ltd has approval to acquire a pastoral lease over 8,167 hectares of land at Mt Pember Station, Lees Valley, Oxford, Canterbury for $1,125,000. ‘It is proposed to farm Mt Pember in conjunction with a property in the same area which is already owned by Wharfdale.’”

Wharfdale is owned by Clipsal Industries (NZ) Ltd (formerly Blue Point Products Ltd), in turn owned by Stenhouse Investments Ltd of Hong Kong, which is owned by Mr A. Chu of Hong Kong.

• Agriseeds Properties Ltd has approval to acquire 28 hectares of land around the Old West Coast Road, near Christchurch, Canterbury, for $580,000 from B., W.K., and N.E. Jenkins. “Agriseeds wish to acquire the property, which adjoins Agriseeds current plant breeding/research/parent seed production facilities.” The land “will provide Agriseeds with an extra two years in its current land rotation timetable, thus substantially overcoming the potential contamination difficulties the company currently faces.” Agriseeds Properties is a subsidiary of Agriseeds Holdings Limited, which is owned 51% by Barenbrug Holdings BV, an agricultural company of the Netherlands, and 49% by the former management and staff of Arthur Yates & Co. Limited, who are New Zealand residents. Agriseeds was formed in a management buy-out from part of the Arthur Yates seed company in New Zealand shortly before the 1987 sharemarket crash. When Barenbrug increased its shareholding to 51% in January 1997, Agriseeds was already 29% owned Barenbrug. The company is based in Darfield, Canterbury, where it has 25 staff. It has another 40 staff and subsidiaries in Australia and Argentina and its annual turnover is over $30 million.