Sector News

Thai Union acquires majority share in German shelf-stable firm

December 21, 2015
Food & Drink

Thai Union Group has announced it has entered into an agreement to acquire a majority stake in German shelf-stable firm Rugen Fisch, owner of leading brand Hawesta.

The current shareholders will stay in the company and will continue its successful development together with Thai Union.

The deal is expected to be completed by the end of January 2016, subject to merger clearance in Germany.

Rugen Fisch, based in North-East Germany, currently generates revenue in excess of €140 million. The company supplies ambient and chilled fish including herring, mackerel and salmon across Germany to all of the leading retailers under key brands such as Rugen Fisch, Hawesta, Ostsee Fisch and Lysell, along with a significant private label business.

The company employs over 850 people across the four facilities in Germany and Lithuania.

“Germany is one of the largest seafood markets and part of our strategic pillars for growth in Europe,” said Thiraphong Chansiri, president and CEO of Thai Union.

The deal offers strategic benefits for Thai Union, as tuna is the fastest growing category in this regional market, the Thai giant noted. “As such, this presents the opportunity for further organic growth, helping deliver key synergies within our existing businesses, most notably King Oscar and Meralliance. This will be achieved through the combined commercial strength of Rugen Fisch and the tuna expertise of Thai Union.”

Berthold Brinkmann, chairman of the advisory board of Rugen Fisch added: “Together we have founded a strategic partnership which will allow for the establishment of innovative tuna products in the German market, aided by the extensive knowledge and experience of Thai Union.”

The cooperation with Thai Union will enable the German company to invest in its business and provide customers with a more diversified product range, he said.

This will mean Rugen Fisch can expand sales in both the domestic and international markets.

Thai Union was advised on this transaction by Houlihan Lokey, with legal advice by Clifford Chance. The vendors were advised by Herax Partners.

From the US to Germany

The move into Germany comes less than a month after Thai Union announced it had reached an agreement with UK-based private equity Lion Capital to mutually terminate the acquisition of Bumble Bee Foods.

Thai Union announced the acquisition of Bumble Bee on Dec. 19, 2014, for $1.5 billion.

Over the course of the last twelve months, both Thai Union and Lion Capital “have advocated vigorously the merits of the deal” to the US Department of Justice (DOJ), said Thai Union.

However, in light of the antitrust investigation initiated by the DOJ on the packaged seafood industry in the United States, Thai Union and Lion Capital have concluded that the clearance is unlikely under the time stipulated in the share purchase agreement.

Back in July, Thai Union first revealed the DOJ probe of the sector, when it said it was cancelling a share offering as a result of the probe. This, according to analysts, suggested there was increased risk of the failure of the deal.

The revelation of the DOJ probe of the sector has caused a string of lawsuits from consumers, food distributors and a retailer, Giant Eagle, alleging price fixing. Some of the lawsuits state Thai Union is likely the DOJ whistleblower.

“We have put a lot of efforts 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,” said Chansiri.

“We have decided to focus our energy on our existing business. Thai Union remains committed to the North American seafood market,” said Chansiri.

Thai Union had been looking at selling its Chicken of the Sea brand in the US, in order to get the deal done.

Source: Undercurrent News

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