Norwegian fish farmer Salmar on Friday launched an 11.8 billion crowns ($1.29 billion) cash bid for rival Norway Royal Salmon (NRS), above an existing offer from top shareholder NTS.
Shares in Norway Royal Salmon rose 13% to 275 crowns at 08:23 GMT, higher than Salmar's offer of 270 Norwegian crowns per share.
Benefits Of The Transaction
A tie-up would lead to significant synergies in the form of cost cuts and increased market access worldwide, Salmar said in a statement.
Both parties have long-standing presence in, and considerable competence from, salmon farming in Northern Norway and combining the businesses will allow for improved utilisation of resources as well as implementation of best practices within operations and the cost structure.
In addition, Salmar and Norway Royal Salmon have significant expertise in the sales and logistic channel and the deal will pave way for improved access to customers worldwide.
Salmar will finance the deal through a number of available sources without impacting its dividend capacity and investments in the value chain, including, but not limited to, available cash and debt financing capacity based on its sound financial position.
NTS' Offer For NRS
Fish farmer NTS raised its offer for NRS to 240 crowns per share last week, having originally launched a mandatory offer of 209 crowns on 16 July.
The offer from NTS, which holds 37.18% of the shares in Norway Royal Salmon, expires on 16 August.
Salmar posted a steeper-than-expected decline in fourth-quarter earnings in 2019, as the company's operating result before adjustments fell to NOK658 million for the October-December period.
Elsewhere, Norway's Mowi posted a bigger-than-expected drop in fourth-quarter profits for 2020, hit by a lower price of salmon amid the coronavirus pandemic.
News by Reuters, additional reporting by ESM. For more Fresh Produce news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.
