Canadian firm takes over Meridian Salmon

One of Shetland’s largest salmon producers, Meridian Salmon, has been bought by North America’s biggest fish farming company, Cooke Aquaculture, in a deal worth £122.5 million, to be finalised this summer.

But the previous owners of Meridian, Marine Harvest, may be fined after an investigation by the European Commission into whether the company broke rules by buying shares in Meridian’s parent company, Morpol, before notifying the Commission.

The Commission ordered Marine Harvest to divest itself of some of Morpol’s fish farms as the deal last year gave it more than a 40 per cent share of UK salmon production, which is the maximum allowed under EU guidelines.

As a result, Meridian’s Orkney and Shetland operations were put on the market. Cooke Aquaculture, which has fish farming interests in Spain as well as North America, fought off competition from Norwegian-owned Scottish Sea Farms, which is Shetland’s second biggest salmon producer, and Bakkafrost, a Faroese company.

According to Cooke Aquaculture chief executive Glenn Cooke, Meridian is a “highly profitable” business and set to become even more so owing to an increased price for salmon that can be achieved.

Mr Cooke said: “We believe this investment in the well respected Scottish industry creates value for our entire group and strengthens our European foothold.”

Meridian generated revenues in 2013 of £80 million and corresponding pre-tax earnings of £24 million.

Mr Cooke added: “The company is highly profitable and expects a significant EBITDA (pre-tax profit) increase going forward.

“This will be driven by an increased sales price per kilo that will be achieved when it is operated as an independent company.

“Meridian is also a cost effective producer with a dedicated management team and employee base. There are many similarities between our corporate cultures and the pristine natural environments and high environmental standard of our farming operations.”

Manager of Scottish Salmon Producers’ Association Shetland office David Sandison, said that the news would put paid to a period of uncertainty over Meridian and demonstrated the solid investment represented by Shetland salmon.

Mr Sandison said: “We welcome the news that there seems to be a final outcome to the process. It will be a relief to all the staff in the company who have been waiting a long time to see what’s happening.

“What this shows is the value being placed on assets in Orkney and Shetland is very solid. The industry has been very profitable over the last couple of years.”

Meridian was created through the acquisition of multiple farming operations by Polish processing giant Morpol, starting in 2010. These included The Lakeland Group and Northern Isles Salmon (formerly Mainstream Scotland) as well as Westray Salmon and Rysa Salmon in Orkney.

Marine Harvest bought Morpol last September with the approval of the Commission, but is now being investigated on the grounds of “acquiring an initial shareholding in Morpol, before the related acquisition was notified to and approved by the European Commission.”

Marine Harvest’s approval is not at risk, but it may face a fine, which is not expected to be “material”.

Today, according to Mr Cooke, Meridian is a “top-performing salmon farmer when measured against other salmon farmers both in Scotland and internationally.”

Cooke Aquaculture describes Meridian as a producer of superior quality and accredited salmon, including organic and Label Rouge. The company also focuses on delivering quality fresh products to European markets within a few hours from harvesting.

Cooke is a Canadian family-owned company with a head office in Black’s Harbour, New Brunswick. Over the past 28 years the family has built an aquaculture company, which will have nearly a billion dollars in annual sales and 2,500 employees following the Meridian acquisition.

It has salmon farming operations in Atlantic Canada and Maine. It also owns Salmones Cupquelan, a salmon farming company in southern Chile and Culmarex, a sea bass and sea bream farming company in southern Spain.

Cooke’s sales and marketing division, True North Salmon, sells a broad spectrum of fresh, farmed seafood products into the Canadian and US markets.