August 7, 2018

Chilean food giant, Agrosuper announced its agreement to acquire a majority stake in AquaChile, one of the largest salmon farmers in the country, in a deal valued at US$850 million. Concurrently, the company also announced the launch of a public share offer to fund the full acquisition of the company.

This deal will place Agrosuper in the position of being the largest salmon farmer in Chile, and the second largest in the world after Norway’s, Marine Harvest. And if approved, it will also see Agrosuper outrank Cermaq and SalMar with production of 230,000 tons per year, or 30 percent of Chile’s total annual output.

Consolidation Nation

Given a combination of climbing widespread consumer demand, rising prices, and the development of technologies that enable companies to scale up fish farming operations in a sustainable manner, Chile has seen a rash of consolidation in its salmon farming sector.

At the beginning of June, AquaChile itself signed a deal to acquire two salmon farming companies, Salmones Magallanes and Pesquera Eden for $255 million. This transaction gave AquaChile a foothold in the salmon farming sector in the southern Magallanes region of the country, a cold-water location known for being ideal for production.

Together, Salmones Magallanes and Pesquera Eden brought a total of 26 fish farms, including a recirculating fish farm and a processing plant located in Puerto Natales. Through these assets, Salmones Magallanes produced 22,900 tons of Atlantic salmon last year, however, the company has the capacity to expand this output to 40,000 tons in the medium term, reports Undercurrent News.

Furthermore, AquaChile has been awarded three new licenses for the Magallanes region, and has the area targeted for further development of a sustainable aquaculture industry.

Meanwhile, Agrosuper bested a field of rival bidders including  AquaChile, Blumar, Los Fiordos, Australis Seafood, and Invermar, to acquire Piscarola Hornopiren and Salmones Frioaysen for $229 million.

This deal, which is expected to close in the third quarter of this year, will give Agrosuper additional licenses to support 40 salmon farms in the Aysen region of Chile.

The latest deal for control of AquaChile will only further solidify Agrosuper’s dominance in Chile’s growing salmon farming industry, and strengthens its position as a key exporter.

“This agreement, which makes us very happy, allows us to generate and take advantage of synergies in environmental, health and commercial matters; and continue contributing to position Chile as an agri-food power internationally through a wide variety of products of the highest quality and safety,” Agrosuper told Undercurrent.

Everyone Loves a Comeback

Chile’s salmon farming industry took a major hit in 2016 when a red tide killed millions of fish, decimating the industry at a cost of approximately $800 million. This outbreak was only exacerbated by outbreaks of viruses among the country’s salmon producers. Despite this, the country’s industry has seen a resurgence, and a flurry of deals as players make strategic moves to increase their presence along the farmed salmon supply chain.  

AquaChile and Agrosuper are not the only companies with their eye on Chile’s Magallanes region. In June of last year, Blumar announced its target of investing $150 million in salmon farming operations in the region.

And at the end of May 2017 the company’s board approved plans for an Atlantic salmon farming project that would include a processing plant, which is expected to produce five million smolts per year by the third quarter of this year, with an eventual output of 21,000 tons by 2020.

Indeed, within recent weeks, AquaChile itself announced its plan to issue shares worth US$340 million on the Norwegian stock exchange to fund the company’s targeted acquisitions.

-Lynda Kiernan