Federated Farmers says it will be watching developments »very closely» as a Shanghai Pengxin Group-backed company looks to take over Canterbury dairy farmer Synlait Farms Ltd.
SFL Holdings has made a $85.7 million takeover offer for 100% of the shares in Synlait Farms. If successful, the company says it will invest a further $20 million directly into Synlait Farms.
SFL Holdings is a partnership comprising Synlait Farms founders Juliet Maclean and John Penno, and New Zealand Standard Farm Ltd (NZ Standard Farm), an indirect wholly-owned subsidiary of Shanghai Pengxin Group Co Ltd.
Shanghai Pengxin Group bought the Crafar farms estate in the North Island after much public debate.
The Synlait offer was conditional on receiving a minimum of acceptance from the holders of 90% of the shares of Synlait Farms and approval from the Overseas Investment Office.
Federated Farmers supported the Overseas Investment Act and especially the much tougher tests incorporated into it, national president Bruce Wills said.
»Clearly, this is a large-scale investment, covering 4000ha of irrigated dairy land. There are new tests introduced three years ago that set the bar much higher with sensitive land.
»We will be examining the application very carefully, because we wish to understand what the strategy is here. »Through a wholly-owned subsidiary, Shanghai Pengxin Group is looking to add to its existing holdings in the North Island, so we need to get the full picture,» he said.
Federated Farmers wanted to ensure there were »real economic benefits» to New Zealand farming and to New Zealand itself, Mr Wills said.
Source: Otago Daily Times