Proposed merger could form NZ's largest kiwifruit postharvest company
The boards of New Zealand kiwifruit companies EastPack and Satara have signed a merger implementation agreement, and are urging shareholders to approve the decision at upcoming meetings late this month.
In a combined statement, EastPack chairman Ray Sharp and Satara chairman Hendrik Pieters said their two businesses were obvious merger partners.
"Their respective strengths and the benefits that will follow from the proposed merger will provide a much stronger platform to deal with the challenges that the industry is now facing, particularly Psa," they said.
A joint release said the merger would lead to the biggest kiwifruit packing and cold storage operation in the country.
"The main reasons for the merger include creating an enlarged co-operative that is owned by growers. The merged company will be totally focussed on grower owners' needs and in a better position to meet their expectations for quality processing, higher orchard gate returns, low packing prices and improved return on investment," the chairmen said.
"We will be creating a business of improved scale utilising the best people, assets and technology from both companies.
"Growers are working hard to survive in an environment with a high New Zealand dollar and high Psa related growing costs. We believe that by combining resources, we can reduce costs and operate more efficiently for the benefit of the growers."
The merger will take place in the form of a share swap, with Satara's non-grower investors offered NZ$0.60 per share plus NZ$0.05 dividend. At the time of writing, this represented a 62.5% premium on Satara's share price.
The chairmen said this offered an opportunity to exit their investments in Satara at a fair price, considering current kiwifruit postharvest prospects.