Overseas investment decision for case 200720018 - Prysmian Power Cable & Systems New Zealand Limited

The application has been approved as it met the criteria.

The Overseas Investment Office is satisfied that the individuals with control of the Applicant collectively have business experience and acumen relevant to the overseas investment, and that the Applicant has demonstrated financial commitment towards the overseas investment. The Overseas Investment Office is further satisfied that each individual that exercises control over the Applicant is of good character and is not an individual of the kind referred to in section 7(1) of the Immigration Act 1987.

Background:
The Applicant is part of a group of worldwide companies owned by Prysmian Cavi e Sistemi Energia S.P.A. (Prysmian Group) which is a market leader in major energy and telecommunications cables business activities. This acquisition is consistent with the overall strategy of the Prysmian Group, that is, to contribute to accelerated growth, generate value through synergies, and to limit risk and integration issues.

Outline of Proposed Acquisition:
The Applicant will acquire the assets of IWC and therefore acquire leasehold interests in the relevant land. IWC operates a manufacturing plant specialising in the manufacturing of aluminium and copper transmission lines as well as aluminium and copper aerial and underground distribution cables. IWC supplies power utilities, is an electrical contractor and an electrical distributor throughout New Zealand. A partnership has been in place between IWC and Prysmian since 2002 to jointly develop the New Zealand businesses of IWC and Prysmian.

Rationale for Proposed Acquisition:
The Applicant wishes to improve its market position in markets with a history of profitability and growth prospects. There are opportunities for growth given the anticipated requirement to upgrade the capacity and capability of the power generation and transmission infrastructure. There are opportunities to obtain cost and efficiency savings. Prysmian's purchasing power for raw materials and the implementation of its management and information technology systems will allow for this.

The proposal is likely to result in the following benefits:

1. Increased competition in the market for the manufacturing and distribution of energy cables in New Zealand; and
2. the introduction into New Zealand of new business skills related to specialist technical expertise and experience in the cable and systems industry.