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 (00:01):
The Rural report on Heather do for see Alan.

Speaker 2 (00:04):
Drive Jamie Mackay. The country is with us, Hello, Jamie.

Speaker 1 (00:08):
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 (00:15):
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 1 (00:30):
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

(00:51):
that voted, they needed 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.

(01:15):
The 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 around all round
supply is going to be good. Mark Win, the chair
who's really staked his reputation on this one, was pretty

(01:37):
tough 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 process
three and a half million sheep and one million cattle
a year. That's a lot of cattle. Forty thousand farmers
supplying them. That makes them bigger than any meat company
here in New Zealand. Turnover of five point eight billion,

(01:58):
which is 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,

(02:18):
high wealth 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 (02:26):
Do you think any of these farmers will all shareholders
would have been put off by Winston Peters?

Speaker 1 (02:33):
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 him on occasions, is totally wrong here.
It's none of his business. He needs to butt out.

(02:54):
These are farmer owned cooperatives. The only people who have
a right to make a decision here are the only
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 Shane Jones 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.

(03:17):
We're 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 no. I

(03:38):
didn't play with lactalise. Thank you, Heather, Well, you're multilingually.

Speaker 2 (03:44):
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 1 (03:50):
The great, the great Keith 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. 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. Some of them paid big money for their

(04:12):
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 (04:26):
Oh brilliant, Hey, Jamie, listen, Thank you very much. Appreciate
Jamie McKay, Hosts of the Country. For more from Heather
Duplessy Allen Drive, listen live to news talks. It'd be
from four pm weekdays, or follow the podcast on iHeartRadio.