Cargill Inc. will acquire Norwegian salmon-feed supplier EWOS AS for $1.5 billion from private-equity firms Altor Equity Partners AB and Bain Capital Partners LLC as the world's largest grain trader expands its aquaculture business.
"This transaction, which is significant and the second aquaculture acquisition Cargill has announced in as many months, is a strategic investment in our long-term growth and evidence of our commitment to the growing aquaculture industry," said David MacLennan, Cargill president and CEO, in a statement.
Bloomberg reported that the deal, expected to close within the year, will make Cargill one of the three largest feed producers in the world according to Gorjan Nikkolik, a seafood industry analyst at Rabobank International.
Cargill said EWOS produces more than 1.2 million metric tons of salmon feed for the biggest salmon producers in the world.
"The acquisition gives Cargill entry into the salmon market and will make Cargill's animal nutrition business a leading player in the growing salmon feed industry, one of the most advanced and professionally managed segments in global aquaculture," the company said.
As part of the deal, Cargill will acquire seven feed manufacturing facilities in Norway, Chile, Canada, Scotland. The company added that the EWOS acquisition will boost its aquaculture capabilities in Mexico, Central America, China, United States, Southeast Asia, India, and Ecuador
It is the second Cargill investment in aquaculture in over a month. In early July, Cargill announced a $30 million joint venture with Naturisa to build a shrimp feed facility in Ecuador.
"With the need for protein expected to grow by 70 percent worldwide by 2050, farmed fish and shrimp offers one solution to meeting this demand, and Cargill intends to play a major role in this growing and important market," Sarena Lin, president of Cargill's Feed & Nutrition business, said in the statement.
Bloomberg noted that aquaculture facilities produced half of fish consumed in 2012 from less than 15 percent in 1990, citing the the United Nations Food and Agriculture Organization. It added that fish-meal prices climbed to a record high last year due to increased demand from the aquaculture industry.
