Thai Union Frozen to buy U.S. tuna firm Bumble Bee for $1.5 billion
By Khettiya Jittapong and Manunphattr Dhanananphorn
BANGKOK (Reuters) - Thai Union Frozen Products PCL TUF.BK, the world's biggest producer of canned tuna, has agreed to buy U.S. competitor Bumble Bee Seafoods for $1.5 billion as part of a plan to double revenue through overseas acquisitions.
The purchase will give Thai Union control of some of North America's best-known seafood lines, including two of the three biggest canned tuna brands in the United States, in its quest to reach revenue of $8 billion by 2020.
"The deal is the largest acquisition in the history of our company and one of the most exciting external growth propositions," Thai Union President and Chief Executive Thiraphong Chansiri told reporters on Friday.
The deal marks the latest instance of consolidation in the global seafood industry, which analysts say has been in flux over the past few years as companies change the way they manage supplies and costs to better cater to shifting consumer demand.
The transaction is likely to be completed in the second half of next year, subject to approval by U.S. antitrust authorities, said Thai Union, whose clients include Wal-Mart Stores Inc (WMT.N: Quote) and Costco Wholesale Corp COST.O.
Thai Union has operated in the United States for over 17 years, and Thiraphong said he expects a "positive response" from the authorities.
Thai Union's Chicken of the Sea is the third-biggest tuna brand in the United States behind Bumble Bee. The top brand, Starkist, is owned by South Korea's Dongwon Industries Co Ltd 006040.KS.
With so few canned tuna producers, major asset sales will be needed to persuade U.S. antitrust authorities to allow the deal to proceed as tuna consumption is declining, antitrust experts said. Continued...