The UK’s Competition and Markets Authority (CMA) has cleared Scottish Sea Farms’ bid to acquire Grieg Seafood Hjaltland UK, paving the way for the takeover of Grieg’s Scottish assets.
In June 2021, Scottish Sea Farms (SSF) – which is co-owned 50/50 by Lerøy Seafood Group and SalMar ASA – signed a share purchase agreement to acquire 100% of the shares in Grieg Seafood Hjaltland UK from Grieg Seafood ASA for the purchase price of £164m.
Included in the deal are the company’s freshwater hatchery, processing facility and 21 marine farms around the Shetland Islands and Isle of Skye which, combined, produced approximately 16,000 tonnes (HOG) of Atlantic salmon in 2020.
This complements the geography of SSF’s own operations across mainland Scotland, Shetland and Orkney, the company said, putting the salmon grower on track to produce 46,000 tonnes in 2022.
Commenting on the CMA announcement, SSF Managing Director Jim Gallagher said: “This is hugely positive news that promises farmers from both companies greater opportunity than ever before to create the best growing conditions, working collectively as one team with regards to the key factors of fish health, stocking regimes and sea lice management.
“This, in turn, will enable us to offer customers a more secure and stable supply of premium quality Scottish farmed salmon.”
It is anticipated that the acquisition, which will be financed with 100% cash consideration from SSF, will complete as early as year-end.
Grieg said last year that, following the Covid-19 pandemic, it had to make some tough decisions by prioritising resources and investment. Its focus will now be on Norway and Canada.
It also emerged last year that this is not the first time that Grieg has tried to sell its Shetland business. Faced with mounting biological problems, the company considered such a plan five years ago, but shelved the move until the situation had improved, deciding instead to wind down in the Isle of Skye. Most of those earlier biological problems have now been satisfactorily resolved, Grieg has said.
The UK’s competition rules required that the CMA consider “whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”
Following the consultation period, the CMA has decided there are no grounds to undertake an “in-depth assessment” of the deal.