Overseas investment decision for case 201510086, 201520009 - Dairy Farms NZ Limited

Overseas investments in sensitive land, being:

• the acquisition by Dairy Farms NZ Limited of a freehold interest in approximately 1,206ha of land at Otapiri, Southland (the “Five Farms”: Hillend I, Hillend II, Southern Sights I, Southern Sights II, Matai)
• the acquisition by EGI-NZ Dairy, L.L.C of up to 55% of the shares in Dairy Farms NZ Limited.

Dairy Farms NZ Limited
United States of America (now 55%)
Various overseas persons (5%)
New Zealand Public (40%)

EGI-NZ Dairy, L.L.C
United States of America (100%)

Dairy Farms NZ Limited (DFL) intends to develop the “Five Farms” to maximise milk production. Short term development is expected to result in a significant increase in cow numbers and the amount of milk solids produced. Longer term, DFL intends to list on the NZX in order to attract an investor base representative of the NZ retail and institutional investor community.

EGI-NZ Dairy, LLC is increasing its shareholding in DFL from 49.51% up to 55% in order to fund the acquisition of the Five Farms.

The overseas investment transaction has satisfied the criteria in section 16 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)(iii) – Increased export receipts
17(2)(a)(iv) – Greater efficiency or productivity
17(2)(a)(v) – Additional investment for development purposes
17(2)(a)(vi) – Increased processing of primary products

Overseas Investment Regulations 2005
28(d) – Owner to undertake other significant investment
28(e) – Previous investments
28(g) – Enhance the viability of other investments
28(j) – Oversight and participation by New Zealanders