Will Icebreaker VF deal get OIO tick?

November 4, 2017

Icebreaker, one of the company’s that made merino fashionable, is selling to a USA company  but the deal needs OIO approval:

US-based VF Corporation needs Overseas investment office approval to buy Kiwi merino clothing maker Icebreaker, meaning the deal is worth at least $100 million. The terms of the deal were not disclosed.

Merino producers have been getting a lot of pressure to sign up to 10-year contracts with Icebreaker. The proposed sale explains that and a good number of committed producers would have made the deal more attractive to the buyer.

VF Corporation has a market capitalization of around US$28 billion and its portfolio includes The North Face, Timberland, SmartWool, Vans, Wrangler and Lee. In its third-quarter result, the company forecast its 2017 revenue would be approximately US$12.1 billion.

Icebreaker had annual sales of $220 million, of which 86 percent were in offshore markets. Its own outlets and e-commerce sales make up 32 percent of sales, according to the company’s latest statement.

While the terms of the deal were not disclosed, Icebreaker confirmed the need for OIO approval due to the size of the transaction, implying a minimum value of at least $100 million. In a separate statement, VF said “the purchase price is not material to VF.” It also clarified that it expects the transaction to close in April 2018. . . 

I would think the deal would be worth considerably more than $100 million. Regardless of how much more, closure by next April is probably very optimistic.

Friends who have had dealings with the OIO, as sellers and buyers, said it was a very time-consuming process.

Unless it gets a straight decline from the outset, it won’t be any faster under the new government.

According to Icebreaker, the deal creates an expanded opportunity for the New Zealand merino industry. “This is a once in a lifetime opportunity for our global Icebreaker team and for our New Zealand wool suppliers to introduce a whole new universe of consumers to the benefits of sustainably farmed, ethically sourced, New Zealand Merino wool,” said Icebreaker founder Jeremy Moon.

John Brakenridge, CEO of the NZ Merino Company, noted VF have also had a long-term commitment to the New Zealand Merino industry through their investment in SmartWool and NZ Merino has worked with SmartWool in areas such as sustainability and social responsibility.

“Today we are seeing record demand and prices for New Zealand merino wool …the synergy of these two brands working as sisters from the same stable to build increased awareness of the Merino apparel category represents an exciting new development for the New Zealand merino wool industry,” he said. . . 

People tend to be less opposed to selling land to foreigners than selling companies.

But no matter who owns it the land and the business carried out on it stay here.

When a company is sold, there is no guarantee anything will stay in New Zealand.

Icebreaker is a New Zealand company and its clothing is designed here using locally grown merino wool but manufacturing has been done overseas for several years.

If the sale does go ahead, people who want New Zealand made merino will still have the choice of buying from companies like Glowing Sky and Mons Royale.

 

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Rural round-up

November 16, 2012

Chinese interest in Fonterra fund ‘predictable’ Feds say:

Chinese interest in investing in Fonterra’s Cooperative Group’s shareholder fund was predictable once the scheme was approved and underlines the need for constitutional protections for the Trading Among Farmers scheme, says the main farm lobby group.

China’s sovereign wealth fund, the US$400 billion China Investment Corp, is in talks to buy units in the $525 million fund with an investment smaller than US$100 million, the Wall Street Journal reported yesterday, citing people with direct knowledge of the plans.

The Fonterra Shareholders’ Fund aims to raise as much as $525 million selling shares in an indicative price range of $4.60 to $5.50 apiece, giving outside investors exposure to up to 7 percent of the dairy cooperative’s equity. The final price will be set by a bookbuild among institutions and NZX firms on about Nov. 27. . .

Huge bio-fuels opportunity for NZ from forestry: Pure Advantage –  Pattrick Smellie:

New Zealand’s plantation forestry estate represents a major opportunity for New Zealand to become more self-sufficient in transport fuels, says the latest report from the Pure Advantage business lobby group seeking support for a “green growth” push in New Zealand.

However, a “crisis of faith” in the forestry industry could stymie the newly emerging potential of forestry – a sector that has long confounded attempts to add value beyond the export of raw logs, mainly to Asian markets.

Pure Advantage trust chairman Rob Morrison told BusinessDesk the fragile state of the forestry industry is a major issue for realising the largest economic opportunity identified by a study conducted by London economic consultancy Vivid Economics and the Business School at the University of Auckland. . .

Icebreaker launches online shopping:

Icebreaker, the iconic merino clothing brand, will launch an online store in New Zealand today, at icebreaker.comin time for Christmas shopping.

“It’s no secret that online shopping is the fastest growing channel in retail today, with clothing showing some of the highest growth,” says Jeremy Moon, Icebreaker CEO and founder.

“We’re a multi-channel business, and our new eCommerce site in New Zealand will complement our presence in retailers throughout the country and in our Icebreaker TouchLab retail stores in Wellington and Auckland. Our customers are increasingly demanding choice – they want to be able to choose to shop either directly from a brand, or from a retailer with a wide variety of brands.” . . .

Prince Charles inspects the Glacial Wool rug bearing his coat of arms:

New Zealand Wool Services International is pleased to make available the attached photographs of the Prince of Wales inspecting a unique six square metre Glacial wool rug bearing his coat of arms during his visit to the New Zealand Shear Brilliance wool exhibition at The Could in Auckland on 12 November. The rug has been commissioned by New Zealand Wool Services International to honour the Prince and recognise his role as a champion and patron of the global Campaign for Wool.


Green could be competitive advantage

July 9, 2011

Being greener could bring both environmental and financial gains and this week Environment Minister Nick Smith and Agriculture Minister David Carter launched a green growth discussion document:

New Zealand needs to consider how it leverages off its clean green brand in global markets and how new technologies can be developed to reduce environmental impacts, Environment Minister Nick Smith and Acting Minister for Economic Development David Carter say.

The Ministers today launched the Advisory Group on Green Growth’s discussion paper in Wellington. The eight-member Advisory Group was announced by the Government in January to ensure the Government receives the best advice on green growth initiatives.

“There is significant work occurring internationally on green growth, green jobs, and clean technology. We need to ensure Government policy helps New Zealand take up the opportunities,” Dr Smith said. . .

Mr Carter said: “This is another part of the Government’s plan to build a faster growing economy. The world is looking for products and services that have lower environmental impacts and we want New Zealand to be well placed to take up these opportunities.

The government’s actions haven’t impressed Pure Advantage a group of business people who believe there’s a huge opportunity in enhancing New Zealand’s natural environment in order to improve our competitive positioning in the global shift to green growth.

We have developed a campaign to work with communities, businesses, Government and iwi to create sustainable economic growth, and assist New Zealand to become a leading exporter of high-value produce, renewable energy and clean technology, with a top-tier in-bound tourism industry.

The founding members have funded the campaign – there’s no corporate mandates or shadowy Government funding. Just successful Kiwis interested in seeing a lot more successful Kiwis.

The group wants to open the debate and fund research and discussion in the hope of getting broad agreement about the best way forward.

Once the way forward is understood, we will drive the change to make it happen.

Underpinning our goal will be robust economic research showing the scale of the challenge and why all New Zealanders must reach for the exciting opportunities arising from green growth.

Members of the group include Air New Zealand chief executive Rob Fyfe, former General Motors chief financial officer Chris Liddell, IceBreaker founder Jeremy Moon and brothers, Lloyd and Rob Morrison.

The environmental gains from being green are obvious, providing that is based on science and not emotion.

Pure Advantage and the government both also see the potential for financial gain.


Where do higher wages come from?

November 8, 2010

“Because higher wages don’t come from government; higher wages come from businesses.”Jeremy Moon on Q&A.

He’s right – though governments do influence how difficult or easy it is for businesses to generate the wealth which enables them to pay higher wages.

Smaller government and the burden that imposes on taxpayers, lower taxes and fewer regulations which are easier to comply with all reduce the costs of doing business.

That leaves more in the business to be spent on wages and expansion which leads to economic growth. That in turn both enables government to provide better social services and reduces the need for some of them.

The more people in better paid jobs, the less need there is for government support which leaves more money for education and health care which makes people more employable . . .

It’s a virtuous circle from which individuals and the country benefit.


Tuesday’s answers

January 19, 2010

Monday’s questions were:

1. Who is North & South’s editor?

2. Who are the three main characters in A Town Like Alice?

3. Who is the founder and CEO of Ice Breaker?

4. Who was made a Dame for her services to children in the New Year Honours?

5. Who said,There is something fascinating about science.  One gets such wholesale returns of conjecture out of such a trifling investment of fact.” ?

Kismet got 2 2/3.

Rob got 2 and a bonus for lateral thinking for 5.

Andrei got one and a wee bonus for giving Twain’s real name as well.

Paul got 2 2/3 and a bonus for satire for his answer to 4.

David got 1.

Lynley Dodd is a Dame but she didn’t get the honour in the New Year honours. She was given the title-less honour a few years ago and became a Dame last year when National reinstated titular honours.

As to the degree of difficulty – that always depends on whether or not you know the answers.

Tuesday’s answers follow the break:

Read the rest of this entry »


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