May 21, 2019

Belfast, Norwegian firms in merger Aquaculture techniques to aid ContiSea

A Norwegian aquaculture company is merging with two of Maine’s biggest seafood producers in a $60 million deal its backers say will link the largest U.S. salmon producer with advanced European technology.

Officials of Fjord Seafood ASA, based in Oslo, and Belfast-based ContiSea LLC late last month signed a letter of intent to merge.

ContiSea has two wholly owned subsidiaries in Maine: Atlantic Salmon of Maine LLC, which produces about 7,000 tons of farmed salmon per year, and Ducktrap River Fish Farm LLC, which produces value-added seafood products.

The two subsidiaries – also based in Belfast – employ about 360, although some of the jobs are seasonal. A spokeswoman said the merger is not expected to affect the number of employees.

The deal occurs as aquaculture has drawn increasing interest from a global market. In Maine alone, aquaculture generates about $42.5 million in annual sales.

The Norwegian company has acquired or merged with a number of other seafood companies in recent years, and claims to have positioned itself to be one of the global leaders of the industry.

Fjord Seafood is publicly held and traded on the Oslo Stock Exchange.

Paul Birger Torgnes, Fjord’s managing director, said in a statement that his company is looking forward to expanding into the U.S. market.

“The merger with ContiSea provides us with a solid platform for further growth [in the United States], the most rapidly developing market in the world for Atlantic salmon,” Torgnes said.

He said Fjord plans to use the distribution network established by ContiSea to sell the bulk of the salmon it produces in farms in Chile. The U.S. companies cite Fjord’s advanced aquaculture technology as the advantage for them.

ContiSea is a recent creation, set up in 1999 as a holding company for two big U.S. agribusiness firms that bought Atlantic Salmon of Maine and Ducktrap River Fish Farm. But the Maine companies have longer histories. Ducktrap, for example, was established in 1978 by entrepreneur Des Fitzgerald, who had been experimenting with smoked seafood.

They were sold in 1999 to ContiGroup, a major poultry, beef and pork producer, and Seaboard Corp., a diversified food processor and ocean transportation company.

Atlantic Salmon of Maine controls 14 ocean sites for raising of marketable salmon. It also owns two hatcheries that produce about 2 million smolt salmon. The salmon are filleted in a 28,000-square-foot Machias processing center and marketed under the name Majestic Salmon.

With the merger, Fjord Seafood projects it will increase its production capacity from its holdings in Norway, Scotland, Chile and the United States to 120,000 tons per year.

The deal must be approved by the ContiSea board March 8. It would involve issuing the company’s current stockholders more than 15 million shares of the new company. ContiSea shareholders would then own 18 percent of the newly formed company, valued at roughly $60 million.

Melissa Field, Atlantic Salmon of Maine spokeswoman, said Wednesday that the merger wouldn’t change any of the products or operations in Maine.

Field said the decision to merge with Fjord was motivated by the “overall landscape” of business concerns. Part of those concerns, Field said, is the current regulatory climate surrounding the aquaculture industry.

Two federal fish agencies announced in November that they would list wild Atlantic salmon in eight Maine rivers as an endangered species. They are now working on a recovery plan for salmon that could place tighter restrictions on Maine’s aquaculture industry.

But Field said Wednesday the decision to merge with Fjord was not based solely on the listing, but was a result of regulatory pressures that includes those likely to stem from the listing.

“So I think, in the sense of the overall regulatory environment, it was such that it probably made [the merger] a smart move,” Field said. “I wouldn’t put it at anything less or greater than any other business looking at a regulatory environment.”

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