IDEAS home Printed from https://ideas.repec.org/a/ags/jlcoop/244026.html
   My bibliography  Save this article

Factors behind the Fonterra Shareholders' Rejection of the Board's Capital Restructuring Plan of 2007

Author

Listed:
  • Nilsson, Jerker
  • Rydberg, Charlotta

Abstract

The New Zealand dairy cooperative Fonterra is one of the largest in the world. In 2007, its Board presented a capital restructuring proposal with the aim of reducing the equity redemption risk, solving members’ portfolio problems, and acquiring capital for the cooperative. The proposal indicated that external owners would be allowed, but that members would own most of the stock. The shareholders rejected the proposal. This analysis of why the proposal failed shows that two specific characteristics of Fonterra were primarily responsible: The shareholders considered the Fair Value Share to be instrumental in securing full member control and the Shareholders’ Council effectively channeled members’ opinions.

Suggested Citation

  • Nilsson, Jerker & Rydberg, Charlotta, 2015. "Factors behind the Fonterra Shareholders' Rejection of the Board's Capital Restructuring Plan of 2007," Journal of Cooperatives, NCERA-210, vol. 30, pages 1-27.
    • Handle: RePEc:ags:jlcoop:244026
    DOI: 10.22004/ag.econ.244026
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/244026/files/30-01.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.244026?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. J. Windsperger & Gérard Cliquet & Thomas Ehrmann & G. Hendrikse, 2015. "Interfirm Networks. Franchising, Cooperatives and Strategic Alliances," Post-Print halshs-01117249, HAL.
    2. Lampros Lamprinakis & Murray Fulton, 2011. "Does acquisition of a cooperative generate profits for the buyer? The Dairyworld case," Agricultural Economics, International Association of Agricultural Economists, vol. 42, pages 89-100, November.
    3. Michael L. Cook, 1995. "The Future of U.S. Agricultural Cooperatives: A Neo-Institutional Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(5), pages 1153-1159.
    4. Peter Vitaliano, 1983. "Cooperative Enterprise: An Alternative Conceptual Basis for Analyzing a Complex Institution," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(5), pages 1078-1083.
    5. Fulton, Murray E. & Hueth, Brent, 2009. "Cooperative Conversions, Failures and Restructurings: An Overview," Journal of Cooperatives, NCERA-210, vol. 23, pages 1-12.
    6. Sebastian Hess & Lena W. Lind & Se Liang, 2013. "Farmers’ Perceived Transaction Costs in Relation to Slaughterhouses of Different Ownership Structure," Agribusiness, John Wiley & Sons, Ltd., vol. 29(1), pages 96-111, January.
    7. Valentinov, Vladislav, 2007. "Why are cooperatives important in agriculture? An organizational economics perspective," Journal of Institutional Economics, Cambridge University Press, vol. 3(1), pages 55-69, April.
    8. Nilsson, Jerker & Ohlsson, Camilla, 2007. "The New Zealand Dairy Cooperatives’ Adaptation to Changing Market Conditions," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 35(1), pages 1-28.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hendrikse, G.W.J. & Nillson, J., 2022. "Board Structure Variety in Cooperatives," ERIM Report Series Research in Management ERS-2022-006-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    2. Karin Hakelius & Jerker Nilsson, 2020. "The Logic behind the Internal Governance of Sweden’s Largest Agricultural Cooperatives," Sustainability, MDPI, vol. 12(21), pages 1-19, October.
    3. Chrysoula MORFI & Jerker NILSSON & Hanna ÖSTERBERG, 2018. "Why Farmers Involve Themselves In Co‐Operative District Councils," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(4), pages 581-598, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jasper Grashuis, 2018. "An Exploratory Study of Cooperative Survival: Strategic Adaptation to External Developments," Sustainability, MDPI, vol. 10(3), pages 1-15, February.
    2. Constantine Iliopoulos & Vladislav Valentinov, 2018. "Member Heterogeneity in Agricultural Cooperatives: A Systems-Theoretic Perspective," Sustainability, MDPI, vol. 10(4), pages 1-22, April.
    3. Michael L. Cook, 2018. "A Life Cycle Explanation of Cooperative Longevity," Sustainability, MDPI, vol. 10(5), pages 1-20, May.
    4. Iliopoulos, Constantine & Valentinov, Vladislav, 2018. "Member heterogeneity in agricultural cooperatives: A systems-theoretic perspective," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 10(4), pages 1-22.
    5. Hendrikse, G.W.J. & Nillson, J., 2022. "Board Structure Variety in Cooperatives," ERIM Report Series Research in Management ERS-2022-006-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    6. Salazar Idana & Galve Górriz Carmen, 2011. "Determinants of the Differences in the Downstream Vertical Integration and Efficiency Implications in Agricultural Cooperatives," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-26, February.
    7. Nilsson, Jerker & Helgesson, Matilda & Rommel, Jens & Svensson, Ellinor, 2020. "Forest-owner support for their cooperative's provision of public goods," Forest Policy and Economics, Elsevier, vol. 115(C).
    8. Jasper GRASHUIS & Michael COOK, 2018. "An Examination Of New Generation Cooperatives In The Upper Midwest: Successes, Failures, And Limitations," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(4), pages 623-644, December.
    9. Marcos-Matas, Gustavo & Ruggeri, Arianna & Ghelfi, Rino, 2018. "The Role of Members' Commitment on Agri-Food Co-Operatives' Capitalization, Innovation and Performance," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 21(3), March.
    10. Jasper GRASHUIS & Ye SU, 2019. "A Review Of The Empirical Literature On Farmer Cooperatives: Performance, Ownership And Governance, Finance, And Member Attitude," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(1), pages 77-102, March.
    11. Smaïl Amghrous & Damien Rousselière, 2019. "L’implication des agriculteurs dans les coopératives dans un pays en transition vers une économie de marché : Une application aux coopératives agricoles de services algériennes," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 31(4), pages 724-749, September.
    12. Eeva ALHO, 2019. "Farmers’ Willingness To Invest In New Cooperative Instruments: A Choice Experiment," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(1), pages 161-186, March.
    13. MCarmen Martínez†Victoria & Narciso Arcas Lario & Mariluz Maté Sánchez Val, 2018. "Financial behavior of cooperatives and investor†owned firms: An empirical analysis of the Spanish fruit and vegetable sector," Agribusiness, John Wiley & Sons, Ltd., vol. 34(2), pages 456-471, March.
    14. George Hendrikse & Li Feng, 2013. "Interfirm cooperatives," Chapters, in: Anna Grandori (ed.), Handbook of Economic Organization, chapter 26, Edward Elgar Publishing.
    15. Stefano Ciliberti & Angelo Frascarelli & Gaetano Martino, 2020. "Drivers of participation in collective arrangements in the agri‐food supply chain. Evidence from Italy using a transaction costs economics perspective," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 91(3), pages 387-409, September.
    16. Dinesh Dhakal & David O’Brien & Peter Mueser, 2021. "Government Policy and Performance of Agricultural Cooperatives: A Case Study in Chitwan District, Nepal," Sustainability, MDPI, vol. 13(21), pages 1-20, November.
    17. Valentinov, Vladislav & Iliopoulos, Constantine, 2012. "Property Rights Problems in Agricultural Cooperatives: A Heterodox Institutionalist Perspective," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 61(3).
    18. Liyan Yu & Jerker Nilsson, 2019. "Social Capital and Financial Capital in Chinese Cooperatives," Sustainability, MDPI, vol. 11(8), pages 1-15, April.
    19. Donald M. Houessou & Ben G. J. S. Sonneveld & Augustin K. N. Aoudji & Frejus S. Thoto & Smith A. R. Dossou & Denyse J. R. M. Snelder & Anselme A. Adegbidi & Tjard De Cock Buning, 2019. "How to Transition from Cooperations to Cooperatives: A Case Study of the Factors Impacting the Organization of Urban Gardeners in Benin," Sustainability, MDPI, vol. 11(17), pages 1-25, August.
    20. Viergutz, Tim & Zubek, Nana & Schulze-Ehlers, Birgit, 2016. "How Spatial Pricing Affects Cooperative Members’ Switching Decisions," 149th Seminar, October 27-28, 2016, Rennes, France 244772, European Association of Agricultural Economists.

    More about this item

    Keywords

    Agricultural and Food Policy;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jlcoop:244026. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/daksuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.