Overseas investment decision for case 201620048 - Wallace Group Limited Partnership

An overseas investment in sensitive land, being the acquisition of interests in approximately 18.1502 hectares of land at 266C & D Wood Road, Waitoa.

An overseas investment in significant business assets, being the acquisition of property in New Zealand used in carrying on business in New Zealand for consideration exceeding $100 million, that property being the business and assets of:

• Wallace Corporation Limited; and
• Farm Brands Limited, South Canterbury By-Products (2009) Limited and Farm Brands Asset Management Limited (together “Farm Brands”); and
• Keep It Clean Limited.

Wallace Group Limited Partnership
James Hay Wallace, New Zealand (29.05%)
Rinaldi Family, Italy (25%)
Hughbert Oliver Spence, New Zealand (14.5375%)
Dawn Bridson, New Zealand (12.6%)
Gaile Spence, New Zealand (9.0875%)
Mary Dawn Bridson Trust, New Zealand (5.4%)
Wallace Staff Holdings Limited, New Zealand (1.55%)
J H Wallace Family Trust, New Zealand (1.4%)
Matthew Spence, New Zealand (1.375%)

Keep It Clean Limited
New Zealand (100%)

Wallace Corporation Limited
James Hay Wallace, New Zealand (58.1%)
Dawn Bridson, New Zealand (25.2%)
Mary Dawn Bridson Trust, New Zealand (10.8%)
Wallace Staff Holdings Limited, New Zealand (3.1%)
J H Wallace Family Trust, New Zealand (2.8%)

Modena Investments (New Zealand) Limited
Rinaldi Family, Italy (50%)
Hughbert Oliver Spence, New Zealand (29.075%)
Gaile Spence, New Zealand (18.175%)
Matthew Spence, New Zealand (2.75%)

The Applicant is a joint venture between Modena Investments (New Zealand) Limited and Wallace Corporation Limited. It has been established to to merge their rendering and tanning businesses and to acquire the business and assets of Keep It Clean Limited, which operates a rendering business in Abbotsford, Dunedin. Modena Investments (New Zealand) Limited is the parent company of “Farm Brands”. “Farm Brands” and Wallace Corporation Limited currently have rendering and tanning businesses throughout New Zealand, and Wallace Corporation Limited operates a casualty stock collection service in the North Island.

The partners in the Applicant intend to grow the combined businesses following the Investment, including by increasing processing capacity at Farm Brands’ rendering plant at Washdyke and Timaru and establishing a collection service to collect casualty cattle from farms in the South Island, similar to the service currently operated in the North Island.   

The overseas investment transaction has satisfied the criteria in sections 16 and 18 of the Overseas Investment Act 2005. The 'substantial and identifiable benefit to New Zealand' criteria were satisfied by particular reference to the following factors:

Overseas Investment Act 2005
17(2)(a)(i) – Jobs
17(2)(a)(iii) – Increased export receipts
17(2)(a)(iv) – Enhanced domestic services
17(2)(a)(v) – Additional investment for development purposes
17(2)(a)(vi) – Increased processing of primary products
17(2)(f) – Offer to sell riverbed to the Crown

Overseas Investment Regulations 2005
28(a) – Consequential benefits
28(e) – Previous investments
28(j) – Oversight and participation by New Zealanders