Itoham to Increase Shareholding in ANZCO Foods

Itoham to Increase Shareholding in ANZCO Foods

Leading Japanese food company Itoham Foods Inc will increase its stake in ANZCO Foods Limited from 48.3 percent to 65 percent if its purchase offer is accepted by other leading shareholders and is approved by the Overseas Investment Office.

Itoham is Japan’s second largest meat based manufactured and processed foods company, with an extensive internal meat sales and distribution network generating annual revenue in excess of NZ$5 billion.

In issuing notice to the Tokyo Stock Exchange Itoham said it will purchase 9,882,113 shares of ANZCO stock in cash transactions of just over NZ$40 million.

The sale of shares involves another leading Japanese food company, Nippon Suisan Kaisha Limited (Nissui), the founder and now chairman of ANZCO, Graeme Harrison, and JANZ Investments Limited which is majority owned by Graeme Harrison in association with senior ANZCO managers.

ANZCO commenced business in 1984 and was initially owned by the New Zealand Meat Producers Board who sold out 11 years later for more than a hundred fold return on their investment.

In 1995 Graeme Harrison led a consortium of investors, including Itoham and Nissui, to purchase the shareholdings of the New Zealand Meat Producers Board and listed company Huttons Kiwi Limited.

Nissui’s operations comprise marine products, processed foods and fine chemicals. It became ANZCO’s second largest shareholder in 2001. Nissui is best known in New Zealand as a 50 percent shareholder in Sealord Group Limited.

ANZCO is New Zealand’s second largest beef company and third largest meat related company, with 3,000 employees and annual sales revenue of NZ$1.3 billion. It operates New Zealand’s only large scale cattle feedlot, has sizeable investments in value add businesses utilising raw material from the Group’s seven slaughter and processing sites, and has the most extensive network of overseas offices associated with the New Zealand meat industry.

Itoham and Nissui both commenced their relationship with ANZCO as meat customers in Japan and then progressed to joint venture partnerships. The joint ventures were over time absorbed in to ANZCO while governance associations in other businesses developed involving ANZCO chairman Graeme Harrison.

Until now Itoham and Nissui have been passive investors in ANZCO, with their investments being associated with former Presidents of both companies.

In 2009 Mitsubishi Corporation became Itoham’s largest shareholder at the invitation of the Ito family. Itoham has subsequently announced its intention to the Tokyo Stock Exchange to grow its business outside Japan by becoming “the most trusted manufacturer of processed meat in Asia”. Itoham’s investment with ANZCO is seen as an integral step to achieving this goal.

Mitsubishi Corporation has one of the world’s most extensive business networks, with more than 200 offices working in collaboration with over 600 group companies in approximately 90 countries. Itoham and ANZCO will access this network.

Food sales fall under the umbrella of Mitsubishi Corporation’s Living Essentials Group, with over 28,000 employees and a strong focus on emerging markets, particularly in Asia, and especially China, Indonesia and India. Mitsubishi Corporation is involved in all segments in the distribution chain, including leading convenience store retailers in Japan and Indonesia.

The core business of both Itoham and ANZCO is meat. Itoham to date has been a domestically focussed market leader in the Japanese ham and sausage and processed foods segment, with Japan recognised as a global innovator in food presentation and consumer marketing. This complements ANZCO’s strong export concentration with long standing deep customer relationships in a number of countries and growing investments in value add businesses.

There will be no change in the current composition of the ANZCO Board. Graeme Harrison will continue as chairman and Mark Clarkson as managing director. However, this is the first time Graeme Harrison will sell shares since becoming a shareholder in 1987. He will reduce his effective stake from just over 20 percent to 14 percent.

At the age of 66, Graeme Harrison has signalled to his fellow shareholders and the ANZCO Board his intention to retire at an appropriate time.

Concurrent with the Itoham purchase offer, Graeme Harrison has made an identically priced offer to the seven smallest ANZCO shareholders to simplify the company’s ownership.

ANZCO’s shareholding has been virtually unchanged since 2001. The company has paid dividends every year since then and maintained a record of rewarding all investors with profitable gains since its establishment in 1984.

The overseas ownership of ANZCO will increase by 8.3 percent from 73.5 to 81.8 percent.

ENDS

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