Seafood M&As are picking up speed. Here are the top deals so far this year
Global economic upheaval has not put a dampener on seafood industry consolidation this year.
The seafood processing, aquaculture, fisheries and aquatech sectors have shown a surprising amount of merger and acquisition (M&A) activity so far in 2024, reflecting both investor enthusiasm and the ongoing need for consolidation.
Deals slowed in 2023 from the year prior. An IntraFish tally showed 77 acquisitions, mergers and significant investment stakes in 2023 — a 7 percent decline over 2022. However, based on the pace so far in 2024, it is conceivable that this year will reach that level, if not higher.
IntraFish on reported over 60 mergers, acquisitions or substantial stake sales through the first nine months of the year.
Ignacio Kleiman, principal at Antarctica Advisors, a boutique seafood advisory group, told IntraFish that this year shows the appetite for some industry players to continue much-needed consolidation on the processing and distribution side in particular.
“It’s been a year of consolidation,” he said. “It’s been a year with larger deals that were more prominent, as opposed to a whole bunch of small deals last year.”
Kleiman noted that some of the larger players with “more imagination” took advantage of supply chain inefficiencies. Japanese giants were among the deal-makers this year, as were Canadian group Cooke, Norwegian firms SalMar, Nergard and Pelagia, and biopharma behemoth MSD.
Kleiman said the recent rate cut by the US Federal Reserve, though it may not have an immediate impact, is building confidence among owners that may have been reluctant to start discussions.
The fourth quarter is also a notorious period for inking deals, so it’s inevitable that the industry will see more come through, according to Kleiman. Though he expects to see consolidation in processing and distribution in particular, the fragmentation across the industry means there are many more deals to come across the entire value chain.
“There has to be more integration and more consolidation…just because that’s a way of capturing more margin and generating a substantial level of synergies,” Kleiman said.
One sector that should be more acquisitive than it has been, given its size and strength, is the Norwegian salmon farming sector, he said.
“They continue to do exactly the same thing they were doing 10 years ago, as opposed to looking for a way of diversifying into other species.”
Anne Hvistendahl, global head of seafood at DNB, the world’s largest lender to the seafood industry, said the Norwegian salmon industry has plenty of consolidation to tackle in its own backyard, with around 80 salmon farmers in Norway.
“Things will happen, and we have mandates in that direction,” Hvistendahl told IntraFish. “You have generational change, so over time there will be fewer players in Norway and in Chile.”
Both in Norway and across borders, the industry can expect to see more deals come to fruition in the salmon sector, but if owners are happy with their operations, it’s difficult to convince them to think about consolidation, Hvistendahl said.
Dag Sletmo, senior advisor for DNB Seafood, put it bluntly: “Everybody wants to buy, and nobody wants to sell.”
Listen to our full conversation with Kleiman on the most recent episode of the IntraFish Podcast, and follow us on Apple and Spotify to hear our upcoming\ conversation with Hvistendahl and Sletmo.
