Jamie Mackay: The Country host on Alliance Group voting for the Dawn Meats deal

Partially selling one of New Zealand's largest meat companies should give it much-needed capital, according to some.

Farmer shareholders of Alliance Group voted to let Ireland's Dawn Meats buy a 65 percent stake in the company, for $270 million.

The remaining 35 percent will still belong to the co-op.

The Country's Jamie Mackay explained further. 

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Episode Transcript

Speaker 1 (00:09):
You're listening to a podcast from News Talk zed Be
follow this and our wide range of podcasts now on iHeartRadio,
The Rural Report on Heather, Do to see Alan.

Speaker 2 (00:21):
Drive Jamie Mackay, The country is with us? Hello, Jamie.

Speaker 3 (00:25):
I can't even get one word or let alone six
hundred and thirty three or whatever, Heather. So you're still
a winner in my eyes?

Speaker 2 (00:31):
Well, mate, thank you, but that don't don't don't be
so stoked. There are some people who have like streaks
of about one thousand plus, so I am but a
child compared to them. Anyway, It's not to be. That's
the end of that for me. Now, Alliance not a surprise,
is it?

Speaker 3 (00:47):
No, not a surprise at all. Look, it was a
really Hobson's choice for the farmers. So the vote finished yesterday.
They announced the results this morning. An overwhelming mandate is
what i'd call it. Eighty eight percent of the shares
on issue voted, which was important because they needed at
least fifty percent of them to vote, and of those voted,

(01:08):
they need a seventy five seventy five percent majority. They
did much better than that. They got eighty seven so
that met the threshold required by the Takeovers Code. You
all know the deal by now two hundred and seventy
million from the Irish meat company. Dawn meets for sixty
five percent of the Alliance group. There are some synergies
and advantages because Dawn meats very strong and beef. The

(01:32):
Alliance is the world's biggest sheep meat processor, so they're
going to balance each other out there. Obviously, Northern Hemisphere
supply versus Southern Hemisphere supply. That all round, all round
supply is going to be good. Markwin, the chair who's
really staked his reputation on this one, was pretty tough

(01:54):
when I was talking to him today. And you know
who were Dawn Meats. While they were established in the
nineteen eighties by three Irish farming families. They processed three
and a half million sheep and one million cattle a year.
That's a lot of cattle. Forty thousand farmers supply eyeing them.
That makes them bigger than any meat company here in
New Zealand. Turnover of five point eight billion, which is

(02:15):
two to three times any meat company here in New
Zealand for eleven processing sites in Ireland at thirteen in
the United Kingdom. But as I said Hobson's choice for
the farmers, they didn't really have much of an option.
The proposal to recapitalize from some high profile, high wealth

(02:35):
farmers didn't really take off. So really, hither it's up
to the batter's box for the next farmer co op vote,
and that is Fonterra.

Speaker 2 (02:43):
Do you think any of these farmers will all shareholders
would have been put off by Winston Peters?

Speaker 3 (02:50):
Oh, I don't know. Winston's blustering away on this one,
and Shane Shane Jones is also as well. This is
all part of the New Zealand first nationalistic view on life,
where any foreign investment is totally evil. Look, Winston, as
much as I admire them on occasions, is totally wrong here.
It's none of his business. He needs to butt out.

(03:11):
These are farmer owned cooperatives. The only people who have
a right to make a decision here are the owners
of the company or in this case the cooperatives, the farmers,
just like the Fonterra one. He's jumping up and down
about that, and Change Ownes was saying, well, Fonterra is
going to come knocking at my door needing favors. I said,
to him, it sounded a bit like a threat. So
that vote, Heather, we'll know that one next Thursday. We're

(03:34):
about to talk about that one Thursday week, October the thirtieth,
And you know you don't look a gift horse in
the mouth. The farmers are of course going to vote
to get three point two billion of the four point
two billion that they're going to get from the sale
to the French dairy giant. Luck tellus, I hope I
got that right. I don't think I did. No, I

(03:55):
didn't go with lactalise, thank you, Heather. Well, you're multilingual, Oz.

Speaker 2 (04:00):
I don't even know that I got it wrong. But
I just I think if you if you just come
at it with some confidence, I think you know, wins
the day.

Speaker 3 (04:06):
The great the great Key Quinn used to say in
rugby commentary back when I was a commentator many years ago.
If you can't pronounce it, just say it quickly, and
I should have. I've missed a trick there. Look, they're
going to get two dollars per share tax free capital return.
That's something like three to four hundred grand for your
average farmer. A lot of that's going to go into debt. Repayments.

(04:27):
Some of them paid big money for their Fonterra shares
in the first place, but a lot of that, some
of it is going to find its way into essential
farming expenditure. And I'm talking about replacing utes and tractors
that are overdue to be replaced. So this is going
to be a real kick in the backside for the economy.

Speaker 2 (04:43):
Oh brilliant, Hey, Jamie, listen, Thank you very much. Appreciate you.
Jamie McKay, Host of the Country.

Speaker 1 (04:50):
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