• Salmon producers under regulatory, financial, climate pressure
• Prefers buying controlling stakes to retain decision making
• Cherry picks advisors best suited for each deal

Mowi, a Norway-based producer of farm-raised Atlantic salmon, is eyeing further M&A amid changing market dynamics, CEO Ivan Vindheim told Mergermarket.

To scale in the salmon industry, producers must acquire a license from the government or buy an industry peer, Vindheim said on the sidelines of the North Atlantic Seafood Forum in Bergen, Norway last week.

Because of this, acquisitive growth is always part of Mowi’s strategy, he added.

Speaking about the salmon industry in general, the CEO noted that it has become more difficult to be a small farmer today than it used to be.

Regulations are getting tougher, compliance requirements are increasing, and taxes are higher, he said, adding that a generational shift is also playing a role. On top of that, there is climate change, tougher biological conditions, and a need for more investment, Vindheim said. Farmers are facing pressure “from all sides and all angles,” he said.

There have been a few sector M&A deals over the past year and beyond, and consolidation will “most likely” continue, he said. Operating in a sector where a license is needed means that acquisitions must be considered, the CEO added.

The NOK 113.578bn (EUR 10.2bn) market capitalisation company, which describes itself as the world’s largest farm-raised Atlantic salmon producer, this week announced the acquisition of Torghatten Aqua’s salmon farming seawater business for NOK 293m.

Last year, Mowi secured Norwegian antitrust clearance and paid EUR 633m to acquire additional 46% stake in the local peer Nova Sea. It now owns 95% of the business.

When opportunities arise, Mowi assesses the fit, the investment case, and whether the price is right, he said.

Mowi prefers to take a controlling stake because it needs the ability to make decisions itself, the CEO said. There can always be exceptions, but the company’s “DNA” is to run and operate the business itself, he said.

For that reason, joint venture (JV) partnership structures do not align with Mowi’s way of thinking, Vindheim said.

In terms of funding, Mowi is among the top 10 listed companies in Norway with access to capital, whether through cash or other sources, Vindheim said. It is all about finding “good projects”, he said.

As for advisors, Mowi “cherry picks” the ones that fit and the ones it believes are most suitable for the deal in question, the CEO said.

Vindheim did not want to be specific about whether it could acquire any of its large peers and noted that it will evaluate assets on a case-by-case basis.

Other large industry players include Leroy Seafood Group, Cermaq, SalMar, and Bakkafrost.

Mowi was named among potential buyers of Lingalaks, the family-owned Norwegian salmon producer that last year had appointed SB1 to advise on potential sale. The company announced in January it had decided to halt sale plans.

Focus on salmon

Over Mowi’s 60‑year history, the company has worked with many species, but over the past decade the focus has been entirely on salmon and that will be the case going forward, Vindheim said. “The minute you include different species, you also introduce a completely new biology, and you need an entirely new setup… It’s much more demanding than people tend to believe,” he said.

The company is currently in seven production regions which are Norway, Scotland, Chile, Canada, Ireland, the Faroe Islands, and Iceland. The only production countries that Mowi is not in, are Australia and Russia, he noted.

When asked whether the company could enter Australia, the CEO said the region is too small, too far away, and offers limited synergies with the rest of its operations.

Last year, Mowi announced that it had initiated a strategic review of its feed division.

Mowi in December announced it had entered into a strategic partnership with Skretting, Nutreco’s aquaculture feed unit, to cut costs across feed formulation, procurement, and logistics while allowing it to keep its in-house feed manufacturing footprint. The partnership was to deliver NOK 650m in annualised net cost savings, according to the announcement.

Mowi also sold its majority stake in fish farming company Dawnfresh to SeaQure Farming last year.

“All our assets are constantly under review,” the CEO said, when asked whether it is looking to sell anything else. He also noted that the company is overall “happy with our setup” and has been through some good years, compared to its peers.