INCJ-backed JV acquires NZ-based packaging business
A Japanese joint venture - 40% owned by the Innovation Network Corporation of Japan (INCJ) - has acquired the pulp, paper and packaging (PPP) unit of New Zealand-based forest products company Carter Holt Harvey (CHH) for just over NZ$1 billion ($857 million).
Tokyo Stock Exchange-listed packaging giant Oji Holdings holds the other 60% of the joint venture.
The PPP unit's assets include pulp and paper mills in Tasman and Kinleith and a large packaging enterprise in Australia. The deal is still subject to regulatory approvals and is expected to complete in the second half of this year.
This was the second attempt by CHH - which is 100% controlled by New Zealand billionaire Graeme Hart - to sell its PPP business. Hart also owns US-based Reynolds Group, one of the world's largest packaging businesses, which has recently been under pressure to reduces it $18 billion of junk-rated corporate bonds.
The first attempt to sell the unit was in 2012 but CHH was forced to refinance $1.45 bllion in debt when no buyer emerged. The company is also looking to sell its building supplies unit.
According to a release, Oji has a history of investing in New Zealand, having previously backed forest products business Pan Pac. Since 2002, the firm claims to have spent around NZ$180 million on forest land and manufacturing investment for Pan Pac including an upgrade of its pulp mill in 2012.
As a public-private partnership launched in 2009, INCJ's remit is to promote business innovation in the Japan. The fund has JPY280 billion ($2.7 billion) of capital with the Japanese government injecting JPY266 billion and the rest coming from a consortium of 26 private corporations. The government also guarantees up to JPY1.8 trillion of additional capital.
AVCJ Research shows that the deal represents the largest Japanese acquistion of a New Zealand-based business since Asahi Group purchased alcoholic beverage makers Independent Liquor Group from Pacific Equity Partners and Unitas Capital for NZ$1.53 billion.
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