Farmer shareholders in Westland Dairy, the New Zealand-based co-op, have voted overwhelmingly in favour of selling their co-op to Chinese dairy giant Yili. At a special general meeting last week, 94% of farmer shareholders in Westland Dairy voted in favour of selling their co-op to Yili at a price of NZ$3.41/share (€2.05/share). This values the takeover of the co-op at NZ$588m (€352m), which includes Westland’s NZ$342m (€205m) in debts.

It is understood the average farmer supplier of Westland Dairy is in line to receive an average payout of NZ$0.5m (€0.3m) from the co-op sale. Westland has been among the poorest performing dairy co-ops in New Zealand after years of financial struggles. The co-op has paid one of the weakest milk prices in New Zealand in recent years.

The sale of Westland is subject to approval from both New Zealand’s Overseas Investments Office and the New Zealand High Court. For Yili, the acquisition of Westland will be its second significant investment in New Zealand.

The Chinese giant acquired Canterbury-based processor Oceania in 2013 and has invested NZ$650m (€390m) in expanding the dairy business.

“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,” said Pete Morrison, chair of Westland Dairy.

“While Westland will cease to be a Co-operative, the board believes the proposed transaction represents the best available outcome for shareholders,” he added.