Grieg Seafood’s acquisition of Grieg Newfoundland Salmon is part of its 2025 sustainable strategy to produce 150,000 tonnes of Atlantic salmon
Image: Atlantic Salmon smolts. (Credit: Wikipedia.org/E. Peter Steenstra/USFWS)
Norwegian seafood company Grieg Seafood has agreed to acquire a majority stake in Grieg Newfoundland, a Canada-based salmon farming company.
Grieg Newfoundland is owned by Grieg Kapital (39%), Kvasshøgdi (39%), Ocean Choice International (OCI) (19.5%) and Knut Skeidsvoll (2.5%). As per the agreement, Grieg Seafood will acquire 99% of the stake in the company, with an option to own the remaining 1% stake retained by OCI.
The deal could be valued at NOK1.55bn
The deal is valued at NOK620.5m ($66.9m), with an optional phase two for an additional payment of up to NOK930m ($100.3m), triggered by reaching volume milestones during the first ten years of operation, after the deal is closed. Thus, the deal is expected to be valued at NOK1.55bn ($167m).
Grieg Seafood stated that the deal underpins its long-term sustainable growth and development. The company aims to harvest at least 150,000 tonnes of Atlantic salmon in order to lower its costs further and to re-position itself in the value chain from a pure commodity supplier to a customer innovation partner.
Grieg Seafood CEO Andreas Kvame said: “For the past few years, we have focused on utilizing our existing licenses with success. This year, we will reach our target of 100 000 tonnes.
“Now we are ready for the next step on our growth journey. By developing salmon farming operations in Newfoundland, using cutting-edge technologies at all stages of the production process, we are strengthening our position as a global leader in sustainable salmon farming.
“With close proximity to important markets on the East Coast of the US, this acquisition significantly strengthens our US market exposure and opens up for synergies with existing operations.”
The Newfoundland project was started in 2014 by Grieg Kapital and Per Grieg Jr. by collaborating with local partner OCI. Grieg Group is the parent company of Grieg Kapital and Grieg Seafood. Per Grieg Jr. is Grieg Seafood board chairman.
In 2015, a memorandum of understanding (MOU) was signed with the Province of Newfoundland to produce Atlantic salmon on seawater grow-out sites in four areas of Placentia Bay.
Eleven licenses for sites have been approved or in different stages of application. The project also received Environmental Impact Study (EIS) approval in 2018 for Placentia Bay.
The project also includes a Recirculating Aquaculture System (RAS) facility. Construction of the onshore smolt-facility began in April 2019.