Bergen, Norway-headquartered Marine Harvest, the world’s largest producer of farm-raised fish, on March 27 announced an agreement to divest its integrated fish farming businesses on the Shetland and Orkney Islands to Cooke Aquaculture Inc. The operations have a combined harvest volume of 17.4 thousand GWT estimated for 2014. The agreed enterprise value (EV) is £122.5 million, which corresponds to an EV/kg of approximately NOK 70. Closing of the transaction is expected during the second quarter of this year.
The divestment is a consequence of the remedies set forth by the EU Commission for the approval of the Morpol acquisition in September of 2013. Based in Ustka, Poland, Morpol is the world’s largest processor of smoked and value added salmon products.
The EU Commission required Marine Harvest to divest farming capacity on the Shetland and Orkney Islands. The agreement is conditional on the EU Commission approving that the purchaser and the transaction as well as the sales terms satisfy these remedies.
The majority of the assets included in the transaction have been booked as assets held for sale, and Marine Harvest’s volumes guidance will not be affected by the transaction. Based on the year-end 2013 balance sheet, anticipated gain on the sale is approximately NOK 300 million. The final gain is to be determined upon completion of the deal.
A completion of the sale is likely to increase the potential dividend for the first quarter of this year. The final Q1 dividend will be decided by the board of directors in connection with the quarterly results announcement planned for April 30.
