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Foreign investment in Aotearoa/New Zealand
Overseas Investment Office - August 2015 Decisions
French Buy Barkers Fruit Processors In Geraldine
An even quieter month at the OIO. In two separate decisions, Andros et Cie SAS, France (100%), received approval to acquire the rights or interests in up to 100% of the shares of Barker Fruit Processors Limited, which owns or controls a freehold interest in approximately 13 hectares of land at 72 Shaw Road, Geraldine. The vendors were Fruit Investments Limited and South Island Food Investments Limited, Fruit Investments Limited, New Zealand (64%) and South Island Food Investments Limited, New Zealand (36%): consideration was $27 million.
The OIO states: "Andros et Cie SAS ("Andros") is a French company that manufactures fruit and dairy products, such as the 'Bonne Maman' brand of jams and preserves. Andros operates 25 factories internationally and runs a global sales and distribution network. Andros considers Barker Fruit Processors Limited ("Barker's") is well aligned with its business, and it will seek to use its significant knowledge of the industry to make improvements and use its extensive distribution network to grow Barker's export business."
In the second approval, the OIO states: "Andros et Cie SAS ("Andros"), sought consent to acquire Barker Fruit Processors Limited ("Barker's"). However, Andros also wanted to allow some of Barker's managers, and indirect owners, to invest back into the Barker's company. This consent provides a mechanism by which the New Zealand minority shareholders can dispose of their shareholding in Barker's should they wish to do so, or should Andros choose to acquire their shareholding". These minority shareholders are Michael Barker, Justin Riley and Nicky Donkers, New Zealand (100%).
More on this sale was reported by Jack Montgomerie at Stuff.co.nz (17/4/15): "French multinational corporation Andros plans to buy a majority stake in South Canterbury jam company, Barker's, for an undisclosed sum. Barker's Director Michael Barker said on Thursday the company had been talking to the multinational, which has an annual turnover of about €2 billion ($NZ2.8b), for about four months, along with other potential investors. He said the Geraldine juice, jam and preserves company started looking for investors about 12 months ago after a group of private investors decided to 'cash up their stake' after an eight-year investment. 'We needed to find a new investor'.
"Barker's was 'almost cut from the same cloth' as Andros, which he described as a federation of loosely-linked entrepreneurial businesses. A visit to the 'very low-profile' family behind Andros in Biars, a town of 2,000 people in southwestern France, helped to convince Barker's that Andros was a 'perfect fit' .In a written statement, Andros Chief Executive and owner, Frederic Gervoson, said the group 'couldn't find a further business to invest in, but we couldn't find a closer one in terms of ethos, quality and passion. We will give Barker's the necessary autonomy and support to confirm its position as a leading manufacturer in the Pacific Region'.
"Barker said the company's Geraldine factory, which employs about 180 people, would continue on a 'business as usual' basis, making the same brands, products and labels. 'They're not sending out a Frenchman to run the business'. He believed the 60-year-old French company was a long-term investor which would take a long-term view of the company, something he said New Zealand lacked. Barker said the company's 'innovative' sauces, chutneys, relishes and other savoury products would add value to Andros.
"The company's 180 staff were 'feeling pretty chuffed' about the deal, Barker said. Some had asked him 'what would your parents have thought?' His father, Anthony Barker, started the family's production in 1969, making wine with elderberries from the family farm. 'I think my parents would have been humbled and amazed', Barker said. Andros owns 25 other factories around the world, including one in China. The company's brands include jam manufacturer Bonne Maman and its subsidiaries include yoghurt-maker Novandis, which France's competition authority fined €38.3 million in March for participating in a cartel. Barker said he was not aware of Novandis' activities. The Overseas Investment Office (OIO) must approve the deal for it to proceed. Barker said the companies did not anticipate any difficulties in gaining the office's approval". The OIO subsequently gave approval four months later. Given the applicant had been convicted by French authorities for participating in a cartel, one has to question whether the good character test was applied in this instance?
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In the only other decision for August, Nelson Forests Limited, United States Public (48%), various overseas persons (27%), Australian Public (13%), Danish Public (9%) and New Zealand Public (3%), received approval for the acquisition of a freehold interest in approximately 224 hectares of land at Dovendale Road, Tasman (McEwan & Monterey Forests). The vendor was McEwans Pines Limited and Monterey Pines Limited, New Zealand (100%): consideration was $2,800,000.
The OIO states: "The Forests on the land will complement the Applicant's existing forestry business in Nelson and Marlborough. Pruned logs from the Forests will be processed in the Applicant's Kaituna sawmill and structural logs will be supplied to the Nelson region's structural sawmills. Following harvest the area will be planted back into plantation forest so as to maintain an ongoing sustainable future log supply in the Nelson/Marlborough regions". See our October 2007 commentary for detail of Nelson Forests' interest in about 16,000 hectares in this region, with cutting rights to a further 62,000 hectares.
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