NEW ZEALAND Law and Practice Contributed by: Ben Paterson, Cath Shirley-Brown and David Hoare, Russell McVeagh
NZX In a transaction involving a sale or purchase by an NZX-listed entity, the NZX will have a role in moni - toring compliance with the NZX Listing Rules (for example, rules relating to continuous disclosure and
government investor” or the transaction involves land or assets that are used in a “strategically important business”. The definition of a “non-New Zealand gov - ernment investor” is complex, but in broad terms the test will apply if the buyer is, or its upstream owners are, more than 25%-owned, directly or indirectly, by one or more government-related entities (such as sov - ereign wealth funds, state-owned enterprises (SOEs), public pension funds and their associated entities) from a single country. This will often apply to private equity funds, depending on the size and composition of their limited partners’ base. Even in cases where OIO consent is not required under the usual significant business assets or sensitive land pathways, buyers will still need to consider whether the transaction involves New Zealand land or assets that are used in a “strategically important business”. If so, the transaction will be subject to the “national security and public order call-in power”, which allows the Minister of Finance to call in the transaction for review and to block, impose conditions on or unwind the transaction if the Minister considers it to pose a significant risk to New Zealand’s national security or public order. This power is intended to be used very rarely. Notification is voluntary, except in certain spe - cific cases. The government has recently announced a series of reforms of the OIA, which, if enacted as proposed, are expected to reduce the OIO’s review period for low- risk transactions and generally result in more efficien - cy through the OIO process. The proposed amend - ments are expected to come into force in early 2026. Reserve Bank The Reserve Bank of New Zealand (the “Reserve Bank”) is New Zealand’s regulator of banking, insur - ance and non-bank deposit-takers. Its main purpose is to promote the maintenance of a sound and effi - cient financial system. In instances where there is to be a significant acquisition by a New Zealand incor - porated registered bank, Reserve Bank approval will be required. This approval can be incorporated into transaction documentation as a condition to the con - tract being completed.
approval of material transactions). Other sector-specific regulation
Depending on the nature of the target business, other New Zealand regulators may be relevant in the context of a transaction. 4. Due Diligence 4.1 General Information Private equity buyers in New Zealand will typically carry out detailed due diligence investigations. The extent of this review will vary, however, depending on the following factors: • the nature of the target business; • the buyer’s existing sector expertise, and the extent to which it is already familiar with the busi - ness; • the proposed level of shareholding to be acquired by the private equity buyer (ie, a minority or con - trolling stake); • the buyer’s overall risk appetite and its budget for advisory fees; • the extent to which detailed seller due diligence has been undertaken and provided to the buyer; and • whether the buyer is required to obtain warranty and indemnity (W&I) insurance and tax indemnity in the SPA. Due diligence will typically be undertaken in respect of financial, tax and legal aspects. In some cases (depending on the factors previously outlined), pri - vate equity buyers will undertake diligence in respect of commercial, insurance, environmental, engineer - ing (eg, where the target has specific critical tangible assets), ESG, anti-bribery and corruption/anti-money laundering and IT aspects.
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