Major Announcement for Merino Industry

Wednesday 1 June 2011

A major announcement about the future ownership of The New Zealand Merino Company [New Zealand Merino] is an historic milestone for the sector.

PGG Wrightson Limited has today announced the conditional sale of its 50% shareholding in New Zealand Merino to Merino Grower Investments Limited [MGIL], which will put 100% of the company into the hands of its grower shareholders.

The $7,625,000 purchase price was based on an independent valuation undertaken by PricewaterhouseCoopers.

Merino Grower Investments Limited Chair Bob Brown says the agreement is subject to approval from its shareholders.

Bob Brown is confident shareholder approval will be achieved, as this transaction is the realisation of a long held dream by merino growers to secure ownership of the strategic direction and future of the business that markets their wool.

Bob Brown says PGG Wrightson is supportive of this transaction and the management of New Zealand Merino has decided to invest in the business and drive an operation focused on generating value for fine wool farmers.

“We have a world-class management team and this provides an opportunity for them to be part of the ownership and the future success of the business,” he says.

“New Zealand Merino was a market leader when it separated from the old New Zealand Wool Board to form its own entity.

“The company has developed a reputation for innovation and building strong relationships in the market place.”

New Zealand Merino pioneered branded contracts with companies such as Icebreaker and Smartwool and proudly promoted the image of New Zealand and high country farmers to overseas markets.

“This acquisition will further strengthen the businesses of our merino growers and is too good an opportunity to miss. The new ownership structure will ensure alignment of all stakeholders for the benefit of the industry and with the inclusion of mid micron growers we will have a strong platform from which to further develop the value of wool and other products that stem from fine wool sheep,” concluded Bob Brown.

Background
Merino Growers Investment Limited [MGIL]
•Owned by 630 Merino Wool Growers

•Ownership currently limited to Merino Wool Growers

•MGIL shareholders approval will be sought to approve the transaction

•And to change the constitution to allow shareholding by mid micron wool growers and NZM employees.

ENDS

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