September 24, 2014

Mitsubishi bids US$1.4 billion for Cermaq

Mitsubishi has offered US$1.4 billion for Norwegian fish farmer Cermaq to claim a larger share of the salmon market for the group as it targets consumers' increasingly health-conscious tastes, Reuters reports.

The bid at US$15.12 per share, a 14% premium to Friday's close - has been agreed by Cermaq's board and is supported by Norway's government, the top shareholder with a 59% stake.

However, the government also said it reserved the right to pick another bidder, fuelling investors' hopes on Monday of a counter offer. World number one Marine Harvest made an unsuccessful bid for Cermaq last year.

"We could imagine that Mitsubishi will use Cermaq as a stepping stone for further consolidation of the still relatively fragmented salmon farming industry in Chile," ABN Amro analystis said.

ABN said Cermaq generates 50 to 60% of its revenues in Chile, making it a top-three player with about 12% market share. Mitsubishi, which has sought to diversify away from its natural resources focus, already owns a Chilean salmon farm.

Mitsubishi has said it aims to double its earnings from non-resource assets by 2020. Securing Cermaq would make it the world's second-biggest salmon farmer.