Bright Dairy & Food, China’s third biggest dairy company by volume, has signed up to buy 51% of Synlait’s milk processing subsidiary, Synlait Milk, for $82 million.
The deal is subject to approval in China and here.
Federated Farmers says it’s an indictment on our capital markets.
“After last year’s abandonment of an Initial Public Offering, it’s a damming indictment on our capital markets that Synlait couldn’t rely on New Zealand to provide the investment capital necessary to fund its expansion,” says Lachlan McKenzie, Federated Farmers dairy chairperson.
Another New Zealand company may get a welcome injection of foreign cash too. Singapore’s OlamInternational has agreed to buy PGG Wrightson’s 11.5 per cent stake in New Zealand Farming Systems Uruguay, subject to regulatory approval, and is making a full takeover offer on the same terms.
I will be surprised if this gets the same criticism that a Chinese company’s bid for the 16 Crafar farms has.
Synlait owns farms, but it is the processing arm not the producing one, in which Bright Dairy will be investing and NZFSU owns land, but in South America, not here.
Many people are not keen on the idea of foreigners taking too big a stake in our land but they’re less likely to be so emotionally attached to these companies.