Cermaq farming centre. (Photo: Cermaq)

Mitsubishi plans to expand its business in Chile

The Japanese conglomerate Mitsubishi Corporation plans to produce about 100,000 tonnes of salmon annually in Chile, if it manages to purchase the Norwegian company Cermaq.

Mitsubishi announced this week that it offers a payment of around USD 1,400 million to purchase the whole of Cermaq, which has operations in Norway, Canada and Chile.

This transaction would turn Mistubishi into the second largest farmed salmon producer worldwide.

Following this announcement, Mitsubishi Corporation’s Corporate Communications Division told the newspaper Estrategia that considering the 80,000 tonnes produced in Cermaq at present in the country and the approximate 30,000 tonnes produced by Salmones Humboldt, it would be able to produce around 100,000 tonnes of salmon annually in Chile.

"The size of the business, coupled with its decentralized supply source will allow us to expand in the sector helping to provide a stable production in the market," the Japanese group stated.

With respect to the possible acquisitions, the company admitted that they are willing to evaluate "other expansions in the industry of the country, depending on the development of the market as such and on how those opportunities are presented to us."

Regarding the impact of the infectious salmon anemia (ISA) virus affecting salmon on the local production after the spread that occurred in 2007, the company explained Estrategia that "it has declined significantly since 2009 thanks to the successful implementation of regulations by the country's government, directed to forestall its recurrence and spread."

The offer approval is subject to a minimum acceptance of at least 90 per cent or a percentage not less than 50 per cent of Cermaq’s outstanding shares. The regulatory approval from the corresponding authorities in Canada, Japan, France and Poland is also required as well as the non-occurrence of a force majeure event that causes an adverse material effect.

The offer is not subject to any financing condition. Mitsubishi Corporation has completed a review of satisfactory due diligence of the legal, financial and operational affairs and expects to settle the transaction in November this year.

The offer price represents a premium of 14.3 per cent to Cermaq’s share closing value on 19 September, 2014, and one of 18.3 per cent of the volume weighted as average value of the last three months bond.

"The offer recognizes the financial and strategic value Cermaq has and offers an attractive premium for shareholders," said Rebekka Glasser Herlofsen, Cermaq’s Board chairperson.

"In addition, Cermaq and Mitsubishi Corporation together will become the second largest farmed salmon company in the world, oriented to higher sustainable growth," she added.

Related articles:

- Mitsubishi offers USD 1.4 billion for Cermaq
- Mitsubishi to purchase Chilean salmon farming company

By Analia Murias
editorial@seafood.media
www.seafood.media

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