Bangkok-headquartered Thai Union, a major producer and distributor of frozen shrimp and the world’s largest packer of shelf-stable tuna products with annual sales exceeding US $3.66 billion, intends to acquire 51% of Rügen Fisch AG in January. Founded in 1949 and based in Sassnitz, on Germany’s Island of Rügen in the Baltic Sea, the company is the market leader in the domestic canned seafood category with a 37% volume share and annual sales topping EUR 140 million.
Rügen Fisch also supplies ambient and chilled fish including herring, mackerel and salmon across Germany to leading retailers under its own name as well as under proprietary brands Hawesta, Ostee Fisch and Lysell, plus a number of private labels.
The company’s Brinkmann family shareholders have specified a purchase price equal to 6.5 times earnings before interest, tax, depreciation and amortization. Thai Union aims to pay for the transaction with working capital.
The buyer sees numerous benefits in acquiring a majority stake in Rügen Fisch, which has production facilities in Lithuania as well as in Germany, as the partnership will give it market leadership status in Germany and further strengthen its overall position in Europe.
Noting that Germany is one of the largest seafood markets in the EU and that tuna is the fastest growing segment in the region, Directors Kraisorn Chansiri and Chuan Tangchansiri said that the acquisition of Rügen Fisch is expected to result in an increase in revenues of approximately two percent, “and will create substantial organic growth opportunities that will achieve promising returns by 2020.”
Word of the investment, which is subject to approval by German authorities, was made less than a month after Thai Union reached an agreement with Lion Capital to mutually terminate the planned acquisition of Bumble Bee Seafoods. It had been trying to buy the San Diego, California-based canned tuna producer for almost a year. However, the US Department of Justice’s ongoing antitrust investigation into the packaged seafood industry involving Thai Union subsidiary Tri-Union Seafoods, which operates Chicken of the Sea, the third-largest tuna brand sold in the United States, got in the way of sealing the deal.
Thiraphong Chansiri, president and ceo of Thai Union, announcing the termination on December 4, commented: “We have put a lot of effort to get this deal approved. However, we also recognize that the clearance is now unlikely due to a higher level of complexity in the process. We have decided to focus our energy on our existing business. Thai Union remains committed to the North American seafood market.”
