China-based Bright Foods’ listed subsidiary is acquiring 50% stake in New Zealand-based meat cooperative Silver Fern Farms for NZ$311m ($197m) as it seeks to import more of agricultural products from New Zealand.
Silver Fern Farms is a sheep and beef exporter in New Zealand. It would sell 50% stake to Bright Foods' unit Shanghai Mailing Aquarius.
The company has been seeking cash injection of $100m to better its balance sheet as well fund its its overseas expansion.
Through this deal, Shanghai Mailing will gain access to New Zealand's quality produce and help triple its revenues to as much CNY30bn ($4.71bn) from 2014.
Although Silver Fern Farms has a share of 27% in New Zealand's beef and sheep meat export market, it has witnessing difficult times due to drop in sheep meat prices and has been trying to bolster its hold in the export markets.
Bright Foods has been on an acquisition spree with its recent purchase being British cereal maker Weetabix and Australian dairy company Mundella Foods. The company already has 40% stake in New Zealand-based infant formula processor Synlait.
Besides Bright Foods, several other Chinese firms have been active in New Zealand which include dairy processors Yashili and Inner Mongolia Yili, both of which have purchased land to build infant formula processing plant. Shanghai Pengxin is another firm that has bought dairy farmland in 2012.
The Chinese firms have been exploring offshore markets to cater to the demands of a growing middle class in the domestic market.
Image: China seeks to import meat from New Zealand. Photo: Courtesy of Mister GC/ FreeDigitalPhotos.net.
