The proposed deal would result in Moana being allocated a large share of quota for certain species. File photo Photo: 123RF
The Commerce Commission has granted clearance for Aotearoa Fisheries, trading as Moana New Zealand, to buy Sanford's North Island inshore fishing business.
Both Moana and Sanford operated inshore fishing businesses that supply fresh fish caught using an annual catch entitlement (known as ACE), which was derived from fishing quota.
Sanford was not selling any of its fishing quota. Instead it would lease quota related to its North Island inshore fishing business to Moana, under a long-term arrangement.
Sanford said the proposed transaction would greatly simplify inshore operations and establish a lower-risk annuity-like revenue stream for its North Island inshore ACE.
The proposed deal would result in Moana being allocated a large share of quota for certain species.
The value of the ACE package started at nearly $11 million for the first year and scaled up to $13m over the next five years before increasing in fixed increments of 1.5 percent a year, against modest expenses.
"This will reduce the negative impact these operations are currently having on Sanford's bottom line," Sanford said.
"Overall, the transaction reduces volatility for Sanford's earnings and enables a re-focus on higher return parts of the business."
The commission indicated it had considered whether giving Moana a controlling stake in this share of quota could substantially lessen competition in any market.
Division chair Derek Johnston said the commission was satisfied that the deal was unlikely to substantially lessen competition in any market.