The last remaining regulatory clearance has been granted for the joint $1.3 billion takeover of Australian food giant, Goodman Fielder by Wilmar International and Hong Kong-based investment company, First Pacific. Less than a week after the Anti-Monopoly Bureau of the Ministry of Commerce of the People’s Republic of China (MOFCOM) approved the deal, New Zealand’s Overseas Investment Office (OIO) granted its approval. The Australian Competition and Consumer Commission (ACCC) announced in September 2014 that it will not block the deal.
The next step toward completing the transaction will be a shareholder vote on consideration of the deal scheduled for February 26. Approval is needed by 75% of the shares cast, and at least 50% of shareholders. Retail shareholders, which represent approximately 10% of total shareholders, are known to be dissatisfied with the terms of the deal and the selling of a major Australian food company to foreign interests.
Goodman Fielder is the largest canola, soybean, and sunflower oil supplier to Australian retailers with iconic brands such as Crisco and Gold’N Canola.
Wilmar and First Pacific’s initial bid of A70 cents per share was eventually reduced to A67.5 cents per share after due diligence revealed needed capital investments and asset write downs. However, the two bidders have material adverse change clauses attached to their final bid that would allow them to walk away from the deal if Goodman Fielder’s recurring earnings before interest and tax decline by $30 million, or the value of net assets falls by $100 million within 2015.
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