A subsidiary of China’s Shanghai-listed Bright Food Group, Shanghai Maling Aquarius, has been cleared by the New Zealand government to take a 50% stake in local meat co-operative Silver Fern Farms in a NZD261m (US$191m) deal.

New Zealand’s associate minister for finance Paula Bennett and land information minister Louise Upston said they were satisfied the deal “would create substantial and identifiable benefit for New Zealand”. In a joint statement, they said: “The investment will put the company in a better financial position and allow it to increase its exports.”

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The ministers noted New Zealand shareholders “will continue to have 50% ownership of Silver Fern Farms, while benefiting from the injection of funds from the new investor”.

The deal follows the approval of Silver Fern shareholders last month.

Under the terms of the deal, Shanghai Maling will help Silver Fern “gain a greater presence in China” and will assist with “product development, market research, government approvals and access to relevant e-commerce sites and 2,000 retail stores over a period of three years”.

Shanghai Maling and Silver Fern are already “working to create a range of retail beef and lamb products specifically for China that are processed and packaged in New Zealand”, according to the New Zealand government.

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Silver Fern is the largest livestock processing and marketing entity in New Zealand, the government said. The company owns around 1,769 hectares of “sensitive land”. “With the exception of land leased for offices, all this land is owned in connection with Silver Fern’s processing plants,” the government said.

“Silver Fern has been, and continues to be, operationally constrained by a high level of debt. The investment is expected to result in Silver Fern reducing its debt to nil and having cash reserves,” the government said. “This will allow Silver Fern to invest in and improve the efficiency of its plant network as well as advance its value-added strategy.”