Through a merger with SalMar, Norwegian Royal Salmon (NRS) can secure a stake in Icelandic Arctic Fish.
However, SalMar already has a presence in the same fjords as Arctic Fish through a 51 percent stake in Icelandic Salmon, which is Arnarlax’s parent company.
With the same ownership interest in two companies that are closely located, it is natural to imagine that there are opportunities for a merger in the long term.
At least that’s what seafood analyst Carl-Emil Kjølås Johannessen at Pareto Securities thinks.
“I think in the long run it will be a desired outcome. The fish for Arctic Fish is already being slaughtered at Icelandic Salmon, and Icelandic Salmon will probably build a new slaughterhouse there now. There are clear synergies. It is completely unnecessary to have two slaughterhouses instead of one large one,” he says to Finansavisen.
Value
The merger of the two companies in Iceland would result in a combined company that currently has an MAB (maximum allowed biomass ed. Note) of over 50,000 tonnes, divided into 25,200 tonnes of salmon from Arnarlax’s licenses, and 21,800 tonnes of salmon and 5,300 tonnes of trout from Arctic Fishs’ licenses.
A combined company will also manage with fewer well boats, work boats and feed boats. In addition, Kjølås Johannessen believes that a lower biological risk can be achieved with better control of the sites through coordinated planning of salmon releases and slaughter.
Following the NRS merger, SalMar will have a 51 percent stake in both Icelandic Salmon and Arctic Fish. In other words, there is still a significant proportion of minority shareholders in both companies. According to Kjølås Johannessen, a key question is therefore what the companies will be worth in a merger.
“Even though SalMar is the largest shareholder in both companies, it is minority shareholders who of course should have a say. SalMar has shown that they can be quite fast, but it is clear that the company will have everything in place around the merger with NRS first, so it may take some time. But when everything is in place and they are formally merged, it can probably happen quite swiftly,” he tells the newspaper.
Potential
SalMar’s new CEO Linda Litlekalsøy Aase tells Finansavisen that a merger of the companies in Iceland is currently not something that has been decided on. However, she acknowledges that there are opportunities to realize synergies between the two companies.
“We have not taken a position on any such thoughts yet. For the time being, we adhere to the rules and regulations, and are competitors in the every day market. Both companies operate in the West Fjords in Iceland and already have good cooperation in a number of areas in the value chain,” she says.
