January 17, 2008

Sale of Starkist piques interest of Asian companies
 

Major Asian seafood companies are looking at the possibility of acquisitions in the US after a major US food business announced the intended sale of its canned tuna business.

Companies in Korea, Singapore and Hong Kong stated their interest in food expansion opportunities in the US, according to Mergermarket after media reports that Del Monte Foods has retained Merrill Lynch to sell its StarKist canned tuna business.

A company source said that Dongwon F&B Co could consider canned food buys in the US. Dongwan F&B is a listed Korean food products provider which produces and distributes frozen, chilled or room temperature foods. It reported sales of US$732.6 million in 2006.

Estimated deal size for StarKist would likely to be about US$181 million, with Dongwon F&B's company source saying it could handle a US$300 million deal.

Singapore-listed F&B company ,Yeo Hiap Seng Limited (YHS), currently produces canned chicken products in Malaysia, primarily for export. YHS has no canned fish business yet. YHS has a market cap of about US$275 million.

Mitsubishi, the listed Japanese conglomerate, had canning operations in Europe and it is likely to consider StarKist. Mitsubishi owns Princes, a UK based producer and distributor of bottled and canned products.

A Southeast Asia food industry analyst suggested that the tuna fish market is more developed in Japan and Korea, thus there would be more potential bidders from these two countries.

Starkist could also be a strategic fit for Hong Kong-listed frozen seafood producer, Pacific Andes.