Bakkafrost agrees to buy majority stake in Scottish Salmon

Faroese salmon farming company Bakkafrost has agreed to acquire a 68.6% stake in The Scottish Salmon Company (SSC) in a binding deal worth DKK4.35bn (£516m).

The stake will be acquired from the current majority owner, investment fund Northern Link. The remaining 31.4% stake will go out to a mandatory tending offer.

SSC is a salmon farming company with operational headquarters in Edinburgh. The company’s operations are on the West Coast of Scotland.

The company is claimed to be the second-largest salmon farming company by harvest volume in Scotland, producing 29,913mt of salmon in 2018 and 18,463t in the first half of this year.

SSC owns exclusive genetic rights to grow Native Hebridean Salmon, which is claimed to be stronger, leaner and firmer than Atlantic salmon.

The acquisition provides Bakkafrost access to the Scottish farming region and will create a combined differentiated global firm in premium salmon with exposure to both Faroe Islands and Scottish premium salmon.

Bakkafrost CEO Regin Jacobsen said: “Bakkafrost’s journey has been characterized by delivering industry-leading growth and profitability combined with a focus on shareholder value creation.

“The Scottish Salmon Company represents an attractive acquisition at this juncture providing exposure to the attractive and premium Scottish salmon farming region with potential for synergies and transfer of best practices.”

In order to achieve efficiencies, Bakkafrost is planning to invest in a modern recirculation plant for smolt production, replacing SSC’s large number of small smolt plants.

The company is also planning investments to replace SSC’s existing seawater equipment.

SSC CEO Craig Anderson said: “The board of SSC considers this offer to be in the best interest of all shareholders as it realises the material value that has been created after nine successive quarters of growth.”