Silver Fern Farms, New Zealand's largest meat processor, has backed plans by local agricultural group PGG Wrightson to buy a 50% stake in the business.

Under the plans, PGG will buy the stake for NZ$220m (US$167.5m) and both sides said the move would cut costs, increase earnings and create an integrated supply chain from "plate to pasture".

Silver Fern chairman Eoin Garden, in a joint statement with Craig Norgate, his counterpart at PGG, said: "There are very clear synergies in terms of cost and performance benefits that both parties bring to the table. These translate to more money in the pockets of SFF's suppliers and benefits to its international customers in the form of year-round supply, grower identification and product tracing, to name but a few."

The deal requires the approval of 75% of the farmers who supply Silver Fern, which plans to retain a co-operative structure.

The vote is planned for September.