KEY POINTS:
Control of one of the largest retail department store chains is about to change, following Government clearance of a $349 million deal for one foreign owner to sell the stores to another.
The 14-store K-Mart chain could soon be in new hands, after the overseas investment watchdog approved a sale.
ASX-listed Wesfarmers got New Zealand Government clearance to give it control of the K-Marts.
Wesfarmers applied to the Overseas Investment Office to buy the K-Mart stores, as part of its takeover of giant Australasian retailer Coles Group, which owns the K-Marts and one distribution centre here.
Wesfarmers' bid for Coles is the largest takeover play in Australasian history. If it goes ahead, it would create an entity with $52 billion in annual revenues and be Australia's largest employer.
The takeover looks more likely to proceed, following an announcement late last month from the Myer family that it would vote in favour Wesfarmers' bid.
Wesfarmers' application to the Government specified just two K-Mart stores: a 4.2ha leasehold site at Waitakere Plaza in Henderson and a 7.7ha leasehold site at Bayfair Plaza in Mt Maunganui.
But it said "various" other regions were also involved.
Under the terms of the Overseas Investment Act, only the Henderson and Mt Maunganui stores needed clearance for a foreign ownership change because the land was deemed to be sensitive.
The decision sheet from the commission referred to the wider ramifications of Wesfarmers' bid on the New Zealand retailing sector.
Wesfarmers Retail Holdings sought the purchase clearance, saying its application was part of the deal for the Perth-based company to take over Coles. The K-Mart deal's value was put at $349,471,563. Wesfarmers has big plans to improve the K-Mart retail offering.
"Wesfarmers advises that the acquisition is likely to enhance the business of both companies and improve the performance of the Coles' business. The proposal is likely to result in increased efficiencies to the New Zealand K-Mart business," the commission said.
Wesfarmers had the business experience and acumen for the investment and had demonstrated financial commitment, it added.
Who gets what?
* Wesfarmers has 38 Bunnings and Benchmark hardware stores here.
* Coles Group has 14 K-Mart stores and a distribution centre.
* Wesfarmers has official clearance to buy K-Mart's interests.
