New Zealand Government agency the Overseas Investment Office (OIO) has approved China-based dairy firm Yili’s proposal to acquire dairy cooperative Westland Milk Products.

The acquisition required the approval of OIO as Yili is purchasing 4.8ha of residential land as well as significant business assets, which are said to be worth more than NZ$100m ($67.2m).

OIO approved the application after it met all the tests required under the Overseas Investment Act.

The board of Westland Milk signed a conditional deal in March to sell to Yili.

Under the investor test, directors of Yili demonstrated business experience, good character and business acumen and the incidental and non-residential use of the land test means the land will continue to be used in the ways it is currently used.

OIO New Zealand Land Information group manager Vanessa Horne said: “It’s important to remember that the tests for this investment are quite narrow. Yili is not buying rural land, which involves very different tests for investors.

“The benefit to the New Zealand test doesn’t apply to this investment because it doesn’t involve rural land. This is a commercial issue for the former shareholders to resolve with the new Westland owners.

“The law is straightforward about what the OIO can take into account when assessing applications, and these sorts of issues fall outside it. I appreciate the high public interest in this application and the OIO is committed to providing as much information as we can so people can understand how we made our assessment.”

Horne further added that Yili met all the requirements needed to buy Westland and also provided additional information requested by the OIO during the assessment.

Yili’s acquisition also needs approval from High Court hearing, which set for 18 July 2019.