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Nordea Bank says Marine Harvest to lead consolidation in seafood industry as fish prices conducive to deals

December 19
12:29 AM 2013

Nordea Bank said Norway-based salmon farming giant Marine Harvest will head the consolidation of the seafood industry as record fish prices make the environment conducive to deals, Bloomberg reported. In the past year, the world's largest salmon farmer have tried to capitalize on the recovery of the prices of fish and the relaxing of restrictions regarding the ownership of farming capacity in Norway. It bought Morpol ASA, a salmon processor, but was not successful in its quest to acquire Cermaq ASA. Bain Capital and Altor Equity Partners eventually bought Cermaq's EWOS feed business. Marine Harvest has purchased more than a quarter stake in Grieg Seafood and has shown interest in furthering its acquisition, the report said.

Nordea Markets Analyst Kolbjoern Giskeoedegaard told Bloomberg by phone, "The tremendous interest in buying companies is driven by good profitability. Those looking to get out of the industry are eyeing the possibility of selling at a good price, and those who are buying have a strong currency to pay with."

From the slump experienced two years ago, salmon prices have largely recovered. In the past three months, prices of salmon from three to six kilograms have gone up 80% to NOK 51.4 per kilogram last week, the report said citing data from financial contracts clearinghouse NOS Clearing ASA. Seafood research consultant Kontali Analyse also revealed that the global market for Atlantic salmon had increased from last year's NOK 50 billion to nearly NOK 70 billion this year.

However, Giskeoedegaard said one hindrance to Marine Harvest's plans is that a lot of fish farmers are under the control of one larger owner like Grieg Holdings in Grieg. This makes it more challenging to "raid" these firms, the report said. However, this is not likely to prevent Marine Harvest in trying to make those acquisitions in Norway and even in Chile where salmon is also farmed, he said.

 

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