Oceana deal could spark new wave of US M&A
South African firm Oceana’s $382.3 million (€341.1 million) acquisition of US menhaden fishing and processing group DaybrookFisheries may embolden other foreign companies to begin investing in the fragmented US seafood sector, and put pressure on domestic players to get involved as well, according to Ignacio Kleiman of Antarctica Advisors, the sole US investment banking advisor on the Oceana deal.
“This will give a lot of confidence for larger foreign companies to put money into the US sector,” Kleiman told IntraFish. “A lot of companies have looked but they haven’t pulled the trigger because it can be hard to understand.”
“This is not just a big deal for Oceana, but for the industry as a whole,” he added. “Other players are going to look into the US opportunities more seriously.”
The American Fisheries Act (AFA), which limits foreign ownership in quotaholding US companies to 25 percent, is one common concern, as is the general challenge of acquiring a company from overseas.
“Crossborder acquisitions are 10 times more complex,” Kleiman said.
“There are a lot of moving parts.”
The increasing interest from overseas buyers will likely spark larger US companies who have been enjoying a “comfortable ride” to
sit up and take action.
“This will force them to get out of their comfort zone,” Kleiman said.
Those larger companies will also need to begin looking outside their own borders to grow as well.
With some 90 percent of America’s seafood being imported, Kleiman said US companies have “huge exposure” to their foreign competition, some who are now competing directly with them on the domestic market.