SalMar and Norway Royal Salmon announce merger agreement

Visscher Seafood acquires salmon exporter NRS, the sales arm of SalMar
Visscher Seafood acquires salmon exporter NRS, the sales arm of SalMar

Norwegian salmon producers, SalMar and Norway Royal Salmon (NRS), have today confirmed their merger agreement through a stock exchange announcement. The agreement, in which SalMar is the acquiring company, is conditional on NRS taking over SalmoNor before the merger is completed; as well as on all conditions for the completion of SalMar's voluntary public offer for NTS shares being fulfilled or waived, or the NTS offer being completed. The journey that began when SalMar announced its intention to take control of NTS appears to be coming to an end.

All parties seem satisfied with the agreement

In statements included in the announcement, Leif Inge Nordhammer, Chairman of SalMar, emphasized that a merger between SalMar and NRS makes sense. "We join strong teams that encompass the best salmon farming know-how in Norway. The merger will also allow synergies to be earlier and better realised than solely through the completion of SalMar's voluntary tender offer to acquire all shares in NTS".

Leif Inge Nordhammer, Chairman of SalMar. Photo: SalMar.

In the same vein are the statements of Paal E. Johnsen, Chairman of NRS, who says that "a merger between NRS and SalMar is based on a sound industrial rationale, while also securing a good solution for the shareholders of NRS". And adds that "through the merger, the shareholders will receive a frequently traded share, and may expect significant synergies and strong dividend capacity, in a merger that values the NRS share at a historically high level".

Meanwhile, in a separate stock exchange announcement by NTS, which owns just over 68 percent of NRS shares, the company announced that it will vote in favor of the merger at the NRS general meeting. "A merger between SalMar and NRS is a very good industrial solution. The merger creates a powerful unit that can generate significant synergies. SalMar has a strong history of operations, profitability and local development and therefore NTS shareholders, through SalMar, will have an even greater potential for further positive value development than through NRS alone", said Vibecke Bondø, chairman of the board of directors of NTS.

The synergies between the two companies are key to the agreement

Competitors until now, the two companies have overlapping industrial interests both in Norway, in the fjords of western Iceland, and offshore. The merger will allow better utilization of the portfolio and available MAB (Maximum Allowable Biomass), thereby improving operations and costs. In addition, the strong logistics and sales expertise of both parties will improve access to customers worldwide. A combination that, according to the agreement announcement, "will strengthen the competence and capacity of the parties, and position them for further sustainable growth".

"The parties have strong company cultures, and the anticipated production growth they expect going forward will strengthen the company's position as an attractive employer requiring competent, local employees. The merger will create an entity that is financially stronger, driven by increased revenue and expected cost synergies", the announcement continues.

As said at the beginning, the transaction will be completed in two stages. First, and before the completion of the merger, NRS will carry out the agreed acquisition of SalmoNor from NTS. The settlement will be in cash and NRS shares, in accordance with the existing and amended agreement. In a second step, NRS will merge with SalMar. Then, both the existing shareholders in NRS and those who have just received the shares issued at the time of the settlement of the SalmoNor acquisition will receive a consideration in SalMar shares and a consideration in cash, as agreed.

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