The face of New Zealand's red meat industry is likely to change forever by the middle of next year after Silver Fern Farms shareholders overwhelmingly voted in favour of selling a 50% stake in their company to Chinese-owned Shanghai Maling.
It was a historic day yesterday for the Dunedin co-operative, which will receive an injection of $261million.
''I think we will be looking back at this date and saying, this was the genesis of the change in the red meat industry in New Zealand, certainly for Silver Fern Farms,'' a delighted chairman Rob Hewett said after a special meeting at Forsyth Barr Stadium, in Dunedin.
But it is not yet a done deal.
Shanghai Maling still has to formally take the proposal to its shareholders on October 30, although that appears a formality, with cornerstone shareholder, the state-owned food giant Bright Food Group, having already penned a letter of support.
Overseas Investment Office and Chinese regulatory approval was also required and that was expected to take between six and nine months, Mr Hewett said.
In the meantime, it was ''essentially business as usual''.
Asked about the OIO process and whether the company was confident of obtaining approval, chief executive Dean Hamilton expected the big considerations to be around employment and economic value.
SFF employed 7000 people and was a large employer in the New Zealand context.
He was confident that as a result of the deal the company would expand its workforce.
Increased sales of added-value products would be reflected in higher farmgate prices, so the value would remain in New Zealand, Mr Hamilton said.
He was also asked about the potential implications of the decision by Associate Finance Minister Paula Bennett and Land Information Minister Louise Upston to reject a bid by a Chinese company to buy Lochinver Station, near Taupo, despite the OIO recommending it be approved.
That the Government had taken a view was positive for SFF, he said.
''That is the Government saying they will have a view on what is preferred foreign investment and what is not preferred foreign investment.''
The Lochinver proposal was about sensitive land, whereas the Shanghai Maling joint venture was primarily about a significant investment in an operating entity.
The capital was being invested in SFF's business and that was a strategic move, bringing assets the company could leverage in China.
That ability to create value, he believed, made Shanghai Maling a very different foreign investor compared with a potential Lochinver investor.
''We believe our proposal will stand on its own merits and will hopefully fall squarely where the Government wants to support foreign direct investment to add value to the primary industry,'' Mr Hamilton said.
Mr Hewett said it was ''the best sort of foreign investment''.
If the transaction goes ahead, SFF would next year be debt-free and have at least $50million in cash - the strongest balance sheet of any player in the red meat industry, Mr Hamilton said.
The combination of the company's ''Plate to Pasture'' strategy and the capital provided by Shanghai Maling would deliver superior returns to shareholders and suppliers over time, Mr Hamilton said.
Mr Hewett said the joint venture was ''a lot more than just about the cash''.
Shanghai Maling, China's largest meat processor, also provided market access.
No other processor would enjoy such a privilege.
There was potential access to nearly 70,000 stores, compared with 225 in New Zealand.
It was also a non-exclusive supply arrangement.
The co-operative still existed and there were a series of protections for shareholders to ensure the collaboration was a true one. Mr Hewett said a merger was ''always something that was fraught''.
''It's a very simplistic discussion to say, 'Let's just put the two together and it'll all be better','' he said.
The status quo was not sustainable and SFF was looking to change that.
It had been a comprehensive process ''not behind-the-bike-sheds discussion'', he said.
A second resolution, put forward by Heriot farmer Allan Richardson and Clinton farmer John Cochrane, seeking shareholder support to require the board to undertake and provide an analysis of a merger with Alliance Group, was overwhelmingly voted down.
Both men were gracious in defeat.
Farmers would want to see increased and sustainable returns and needed to ''embrace'' the new joint venture, Mr Richardson said.
The intention was ''never to force two unwilling dance partners to the dance floor''. Mr Cochrane accepted farmers had spoken and he fully supported the result.
Mr Hewitt said SFF remained frustrated it had not be able to drive any form of collaboration in the industry and remained open to the concept.
As a consequence of the joint venture, overcapacity, particularly in sheepmeat in the South Island, had not gone away.
The company's balance sheet, post-transaction, would allow Silver Fern Farms to put changes in place in its business and, ultimately, he believed the strong financial position would drive opportunities around collaboration about ''partnerships with dance partners'', Mr Hewitt said.
