Marine Harvest and AquaChile Merge
February 25, 2015
By Liza Mayer
Fish farming giant Marine Harvest ASA (MHG—New York Stock Exchange) has merged its Chile operations (Marine Harvest Chile) with the South American country’s largest salmon firm AquaChile, buying a 43 percent stake in January, taking advantage of a Chilean market where prices have been squeezed due to fish health issues and a lack of investment capital regionally, according Marine Harvest spokespeople.
The announcement on January 19th saw the Norway-based salmon producer’s stock on the New York Stock Exchange (NYSE) rise to a three month high of $14.27 and saw its best results on the Oslo exchange with a rise of 5.9 percent, the steepest jump on that stock exchange since 2012, to 110.2 kroner, according to Bloomberg and MarketWatch reports.
The deal to merge the two companies’ operations under the AquaChile banner comes as Chile and Norway struggle to meet global demand growth driven by emerging markets, in Asia particularly, where more middle-class residents seek healthier diets.
Marine Harvest Chile, including recently acquired Acuinova, will be merged into AquaChile, whose shares surged as much as 33 percent on the Santiago stock exchange the day of the announcement.
“The merger between AquaChile and Marine Harvest Chile is in line with Marine Harvest’s strategy of forming a world leading integrated protein group,” said Marine Harvest Ole-Erik Leroy, in the merger statement. “Our already strong position within salmon farming in Chile will be further strengthened and the combination of these excellent companies will form a very efficient Chilean industry from a sustainability point of view.”
Victor Puchi will remain as chairman of the new AquaChile, which will continue trading on the Santiago exchange. The deal gives Marine Harvest an option from June 2016 to increase its ownership of AquaChile to 55 percent via a public tender offer.
The combined company will have production capacity of about 260,000 metric tons of salmon in 2015, compared with 165,000 tons in 2014, Marine Harvest said.
Marine harvest argues the merged companies will be better prepared to improve fish health and the sustainability of the Chilean salmon industry, which was ravaged by outbreaks of infectious salmon anemia in 2007.
Industry analysts praised the deal. “It’s the first major purchase by Marine Harvest in 10 years and is in line with its strategy to grow in Chile,” Nordea analyst Kolbjorn Giskeodegard told a reporter at Bloomberg News by telephone the day of the deal. “It also addresses the need for consolidation in Chile to solve the biological problems.”
— Erich Luening