Westland has only one interest class of shareholders and 2,775 votes available for voting, and more than 93% of votes cast approved the deal.
Chairman Pete Morrison said, “When the Board initiated the strategic review process, we did so with the full understanding that all Westland farming families needed to have a competitive milk payout. We know this has been, and is, a driving need for all shareholders.
“This proposed transaction will secure a competitive milk payout for at least 10 seasons for all of our existing shareholders and ensures that all of our existing shareholders’ milk would be picked up for 10 years.
“The offer of $3.41 per share is significantly higher than the independent adviser’s valuation range ($0.88 to $1.38 per share) and the milk supply commitment ensures a minimum price for 10 seasons of at least the Fonterra Farm Gate Milk Price.”
Morrison said that while Westland will cease to be a cooperative, the board believed the proposed transaction represents the best available outcome for shareholders.
Yili, the largest dairy producer in China and Asia, owns more than 130 branches or subsidiaries, and its products are sold under more than 1,000 brands.
CEO of the Yili Group, Jianqiu Zhang, said, “We are deeply honoured that Westland shareholders have shown such strong faith in Yili to become the custodians of one of New Zealand’s most trusted brands.
“We understand how important the dairy industry is, not only to this region, but to New Zealand, and we take seriously the trust Westland’s farmers have placed in us.
“We see the future very much as a partnership arrangement with Westland farmers and want to use our expertise, resources and access to growing international markets to build a brighter future for the company, its farmers and the community.’’
The Chinese company already has businesses in the area, having acquired Oceania Dairy Group in 2013. Since then, it has invested approximately NZ$660m (US$442m) in establishing milk powder, infant formula and UHT production lines for Oceania.
Zhang said it was important for Yili to offer its farmers milk price and advance payment terms that would ensure the future viability and sustainability of its business partners.
“At our Oceania processing plant at Glenavy, we have increased the average price and advance percentages to local dairy farmers because we believe that supporting our farmers and their families is the best way to achieve our business goals,” he said.
“If our offer is passed, we will be working in a similar way with Westland to build a strong and secure future for Westland Milk.”
The deal still needs to obtain regulatory consent from the Overseas Investment Office and approval from the High Court (with the final court hearing scheduled for 18 July).