Marine Harvest, the world's biggest salmon producer, boosted
a drive to become a feed-to-table fish giant by buying 48.5% of smoked salmon
group Morpol, and unveiling plans to buy up the rest of the shares.
The Norwegian group paid NOK938m ($167m) for the initial
stake, bought from Jerzy Malek, who founded Morpol 16 years ago, since when it
has grown into a salmon products group present in 39 countries, and employing 3,500
This deal, which Marine Harvest will pay in a mixture of cash
and shares, equates to a Morpol stock price of NOK11.50, a premium of 39% to
the closing price in Oslo on Friday.
And Marine Harvest is to submit an offer for the rest of
Morpol stockholders to sell out at the same price, which values Morpol's total equity
at NOK1.93bn ($344m).
The acquisition "in line with Marine Harvest's strategy of
forming a world-leading integrated protein group", Ole-Eirik Leroy, the Marine
Harvest chairman, said.
While Morpol has some salmon farming activities, to add to
the Marine Harvest production empire, these represent a relatively small part
of the group, and in the July-to-September quarter contributed only about E500,000
out of group operating profits of E4.6m.
The bulk of Morpol's operations are in markets such as smoked
salmon and gravadlax, meaning that Marine Harvest's "presence within value-added
processing activities will take a giant leap through this transaction", Mr
With Marine Harvest in October unveiling an NOK800m ($140m)
investment in feed production, in an effort to curtail costs, the group has gained
"a great starting point to become a unique integrated protein provider.
"The board believes that such strategy will provide
significant operational benefits, as well as boosting and stabilising the long-term
earnings power of the group."
Marine Harvest is seeking to diversify throughout the salmon
production chain in an effort to avoid the volatility of commodity salmon
markets, with low fish prices behind an 84% slump in third-quarter earnings.
Mr Malek "has been a pioneer within the value added
processing segment in Europe", doing an "impressive job with developing the
smoked salmon segment", Marine Harvest said.
Morpol, which Mr Malek founded in Poland, said it had been
informed in September of his desire to sell up, "and made information available
for potential buyers in order to secure the interests of all shareholders".
The Morpol board "will in due time revert with a fairness
opinion and a statement" over the offer from Marine Harvest, which said it also
expected to have to make a filing to European Union competition authorities.
Marine Harvest shares closed up 0.4% at NOK5.08 in Oslo.
Morpol shares soared 37% to NOK11.35, close to the value of the bid.