The Competition Tribunal has conditionally approved the proposed merger whereby subsidiaries of JSE-listed seafood and aquaculture company Sea Harvest intend to acquire certain subsidiaries of Terrasan.
The subsidiaries being acquired are those engaged in the catching, processing and sale of pelagic fish, as well as in the farming, processing and selling of abalone.
Sea Harvest in January announced the proposed R965-million acquisition, which involves its Pelagic Fishing and Aquaculture subsidiaries acquiring Terrasan’s Aqunion, Saldanha Sales and Marketing and West Point Fishing businesses.
The tribunal’s conditions to the approved merger seek to remedy concerns relating to employment and the exchange of competitively sensitive information.
Sea Harvest’s main seafood business is the fishing of cape hake in South Africa and prawns in Australia; the processing of the catch into frozen and non-frozen seafood for marketing and sale; and the sustainable farming and marketing of abalone.
Of relevance to the proposed transaction is that Sea Harvest catches, processes, supplies and markets pelagic fish (anchovies and pilchards). Sea Harvest also has activities in the aquaculture industry.
The target firms include the subsidiaries of Terrasan which operate the pelagic fishing business and abalone business, referred to as the Aqunion Abalone Business.
Aqunion operates Terrasan's abalone business, which includes abalone farming; ranching; processing; sales and marketing; as well as the manufacture and sale of aquafeed for use in abalone farming.
Saldanha Sales and Marketing and West Point Fishing operate Terrasan’s pelagic fish business, referred to as the Saldanha Fishing Business.
It conducts business activities such as harvesting; processing pilchards into canned pilchards and anchovies into fishmeal and fish oil; and supplying and marketing pelagic fish.
The Saldanha Fishing Business produces canned fish products out of pilchards for the local market and high-quality fishmeal and fish oil out of anchovies for local and export markets.
West Point Fishing is based in St Helena Bay, in the Western Cape, while Aqunion is based in Hermanus and Gansbaai, in the Western Cape.
Sea Harvest is confident that the merger will create value and diversification into wild caught pelagic species and their processes products. It will also enable the group to add value to and scale its small sardine and anchovy pelagic quota where Sea Harvest currently has a small footprint.
It will also add a 118-year-old brand to the group, complementing its 60-year-old hake brand and add a mature abalone business with a diversified customer base to Sea Harvest’s portfolio.
Terrasan CEO Danie du Toit says the deal sees both companies benefitting from scale and synergies, leaving the combined operations well positioned as a South African champion to exploit international opportunities.