Cooke reveals interest in Huon, setting up fight with JBS

Cooke Aquaculture has confirmed its interest in purchasing Tasmania, Australia-based salmon-farming firm Huon Aquaculture, in the midst of a takeover bid from Brazilian meat processing giant JBS.

However, JBS has run into difficulty in the form of activist investor Andrew “Twiggy” Forrest, who has used his minority interest in Huon to push for increased environmental standards. In response, JBS issued a parallel bid for control of the company that seeks a 50.1 percent minimum acceptance condition. In a notice filed with the Australian Stock Exchange on 17 August, Huon announced JBS had upped its ownership to 40.53 percent of the voting power of the company.

On Thursday, 19 August, Cooke Aquaculture President and CEO Glenn Cooke told Australia’s The Mercury Tasmania was “an attractive state to invest in.”

The Blacks Harbour, New Brunswick, Canada-based seafood firm, which had CAD 2.4 billion (USD 1.9 billion, EUR 1.6 billion) in sales in 2018, has its eyes on Huon, Cooke said.

“Huon holds tremendous promise as an established company to continue producing world-renowned salmon and build upon the region’s talented fish-farming workforce,” Cooke told the Mercury.

Asked by SeafoodSource for additional information regarding Cooke’s interest in Houon, Cooke Vice President of Public Relations Joel Richardson said he had no comment.

The Mercury reported Cooke had hired Melbourne, Australia-based corporate advisory firm Kidder Williams and its founder David Williams – the former owner of Tasmania-based salmon-farming firm Tassal – as an advisor in its effort to acquire Huon. It also reported Cooke had made an expression of interest in Huon earlier in 2021 but was outbid by JBS. Williams told the Mercury he did not expect JBS to receive approval from Australia’s Foreign Investment Review Board, which is charged with evaluating foreign investment proposals and monitoring foreign-controlled businesses operating in the country.

“What Tasmania really needs most at the moment is a safe pair of hands, an experienced operator who can take the industry to the next level … and is world’s best practice,” Williams said.

Tasmanian Alliance for Marine Protection Co-Chair Peter George has written to FIRB Chair David Irvine urging him to “use your foreign investment review powers to reject the proposed takeover” of Huon by JBS. But George said his organization opposes all ocean-based farming and described Cooke as “a nicer looking version of JBS” that was “still committed to sea-based operations.”

“There’s got to be a commitment to get out of the ocean,” he said in his letter, dated Monday, 9 August.

JBS is also facing pressure in the United States, where two powerful U.S. senators have called on U.S. Treasury Secretary Janet Yellen to commence an investigation into the São Paulo, Brazil-based company, which is the largest meatpacking and distribution company in the world.

U.S. Sen. Bob Menendez (D-New Jersey), the chairman of the Senate Foreign Relations Committee, and U.S. Sen. Marco Rubio (R-Florida), the ranking Republican member of the committee, requested Yellen investigate whether JBS used proceeds from a bribery scheme to expand its U.S. operations, according to The Hill.

JBS, which owns Pilgrim’s Pride and Swift & Co. in the United States, paid a USD 256 million (EUR 218.8 million) fine to the U.S. Justice Department in October 2020 to settle charges it violated the Foreign Corrupt Practices Act (FCPA). Those charges came in response to JBS co-owners and brothers Wesley Batista and Joesley Batista admitting the company paid USD 150 million (EUR 128.2 million) to bribe more than 1,800 Brazilian government officials to secure USD 1.3 billion (EUR 1.1 billion) in loans from the Brazilian Development Bank and federal pension funds. The Batistas have a combined net worth of nearly USD 6 billion (EUR 5.1 billion), according to Bloomberg.

“When foreign companies benefit from corrupt practices and spread them to US markets, they jeopardize our economic security, present direct risks to our businesses, and undermine our efforts to fight corruption abroad,” the senators wrote in a letter to Yellen. “With JBS planning further U.S. acquisitions in the near future, the need for a thorough investigation is urgent.”

Separately, JBS USA and Pilgrim’s Pride paid more than USD 100 million (EUR 85.5 million) each in fines earlier this year to settle charges they fixed the prices of poultry and pork sold in the United States, according to Food-Dive.

Photo courtesy of Cliff White/SeafoodSource