Pan Fish Buys Rival to Create Biggest Fish Farmer
Date: 07-Mar-06
Country: NORWAY
Author: John Acher and James Kilner
Analysts have long predicted consolidation in the fish farming business which has grown into a multi-billion dollar industry over the last few decades.
"The company creates the strongest unit in the industry and will become a driving force in the continuous development of fish farming," Pan Fish Chief Executive Atle Eide said in a statement.
Billionaire John Fredriksen, Norway's richest man and owner of the world's top independent oil tanker group Frontline, controls Pan Fish.
Pan Fish will fund the takeover from Fredriksen's own investment group Geveran - which earlier on Monday bought Marine Harvest from tanker company Stolt-Nielsen and Dutch food company Nutreco - with a 680 million euro share issue and 700 million euro in debt.
Nutreco said it had sold its 75 percent stake in Marine Harvest for 1.04 billion euros with a gain of about 350 million euros to develop other areas of its business and Stolt-Nielsen said proceeds of $350 million made a $80 million profit.
But their shares dropped.
Nutreco's shares finished the day down 9.4 percent and Stolt's shares dropped 3.3 percent.
BIRD FLU
Lifestyle changes and fears spread by bird flu over the safety of poultry have in part pushed up salmon prices and in January a kilo of Norwegian salmon sold for 26.75 Norwegian crowns, nearly a 16 percent increase from a year earlier.
Chile and Norway are the world's largest fish farmers and seafood is Norway's third most valuable export after energy and metals.
"While the global fish farming industry has been very fragmented, the customer side has been consolidated and is today dominated by a few large companies," the Pan Fish statement said.
"A market share of approximately 20 percent in salmon provides the combined company with the robustness that will enable it to continue to grow the fish farming markets and introduce farmed fish into news regions."
Pan Fish, based in south-west Norway, also bought Geveran's 25.7 percent stake in Norwegian rival Fjord Seafoods on Monday for 1.3 billion Norwegian crowns through a private placement of stock.
The deal indirectly increases Fredriksen's control of Pan Fish, in which he was already the main shareholder. He also owns Stolt-Nielsen.
Pan Fish shares had been suspended on the Oslo stock exchange throughout Monday but the combined company would be worth about $2.5 billion, given Pan Fish's Friday closing market capitalisation of about $910 million.
The deal needs approval from regulatory and competition authorities. It restores to Norwegian ownership a business that Nutreco built largely by buying energy company Norsk Hydro's fish farms in 2000.
DnB NOR Markets, Carnegie and Pareto will act as advisers to Pan Fish and managers of the share issue.
Pan fish said the deal will be completed by March 28.
(Additional reporting by Nicola Leske in Amsterdam and Ina Vedde-Fjaerestad in Oslo)
