Takeover Speculation, page-247

The national interest test applies to all foreign entities and it has a number of dimensions. It is also at ministerial discretion. See more details here:

https://www.linz.govt.nz/overseas-investment/discover/overseas-investment-tests/national-interest-assessment

What the Minister considers

When determining whether a transaction is contrary to New Zealand’s national interest, the Minister of Finance will consider a range of factors, depending on the investment.

The Minister may consider:

• National security, public order, and international relations.
• Competition, market influence, and the economy.
• Economic and social impact. The existing benefit test serves as a guide for this.
• Alignment with New Zealand’s values and interests. Consideration is given to broader considerations – for example, environmental policy, and giving better effect to Te Tiriti o Waitangi.
• The character of the investors.

The Minister will also determine whether action is required to mitigate any risks to national interest associated with the transaction.

Also, the OIO just conducted a national interest test on A2M's investment in Mataura Valley Milk. Obviously, an increased NZ stake in an NZ asset was deemed in the national interest. It described the MVM transaction as involving significant business assets and sensitive land. So at the very least foreign takeover of A2M would involve a reversal of the benefit to NZ documented there, plus all the other issues around milk supply/contract arrangements with farmers mentioned above.

You can read that full assessment here:

https://www.linz.govt.nz/overseas-investment/decision-summaries-statistics/2021-06/202000875

The Applicant is a dairy company which sells the ‘a2 Milk’ brand of products, made with milk from cows that produce milk naturally containing only the A2 beta casein protein type. It was founded in New Zealand and is listed on the NZX.

The Applicant intends to acquire up to 100% of the ordinary shares in Mataura Valley Milk Limited, which owns a milk processing plant and 30.5 hectares of land at Waipahu Highway near Gore. The Applicant intends to upgrade the plant and use it to produce a2 branded milk powders and infant formula which will then be exported to overseas markets.

The investment will create up to 11 new jobs and retain 78 existing jobs, will result in the construction of new laboratory and testing facilities, and will improve the productivity and efficiency of the plant. The extent of New Zealand control will increase as a result of the investment, and the strength of the overseas ownership blocks will be reduced.

This investment is consistent with the Government’s commitment to building strong regional economies and ensuring that provincial regions, such as Southland, are able to attract skilled workers.