Icelandic Seachill in talks with Hilton Food Group on acquisition

Hilton Food Group, one of the United Kingdom’s largest suppliers of red meat may be talks to acquire Icelandic Seachill, according to media reports.

Icelandic Seachill is owned by the Icelandic Group, which has been offloading assets over the past two years. The group stated its intention in December 2015 to divest itself from all of its seafood-related business by 2019.

Hilton Food Group, a major supplier of processed beef and lamb to U.K. grocery chain Tesco, recorded GBP 1.24 billion (USD 1.31 billion, EUR 1.11 billion) in revenue in 2016. The OC&C Grocer Index, which lists the top 150 food companies in the U.K. by size, placed Hilton Food Group 17th in its 2016 ranking. 

Seachill, a leading supplier of chilled fish to the U.K. retail market and owner of retail brand The Saucy Fish Co., had revenues of GBP 266.3 million (USD 340.5 million, EUR 318.4 million) in 2016.

Iceland Seachill CEO Simon Smith confirmed to SeafoodSource in April that his company’s ownership group was actively seeking a sale. Contacted by SeafoodSource on Thursday, 3 August, Smith had no comment on Hilton’s interest in Seachill.

Hilton Food Group Investor Relations Manager Julia Brown confirmed her company is pursuing an acquisition but declined to name Seachill is its target. In a statement, the company said “it is at an early stage of discussions in relation to such a transaction.”

“There can be no certainty at this time whether any agreement on such transaction will be reached, and a further announcement will be made as and when appropriate,” the statement said.

A marketing memo prepared by U.K.-based trading house Peel Hunt, acquired by SeafoodSource, further hinted that Hilton Food Group is pursuing Seachill. (The report noted a potential conflict of interest in reporting on Hilton, disclosing that Hilton is a client of Peel Hunt and has a share in the company.)

“Hilton has confirmed that it is in early stage talks regarding a potential acquisition. We assume this relates to Seachill, where we understand the company to be in exclusive talks,” the report, authored by analyst Charles Hall, noted.

The acquisition would allow Hilton to expand its range of products, Hall said. 

“This would be an interesting move for Hilton and they would only do it if supported/encouraged by Tesco,” Hall wrote. “It does fit with their strategy of broadening the product range to its key customers – having started in red meat, the company now produces a range of other products including pork and pizza.”

Shares of Hilton Food Group listed on the London Stock Exchange were up more than five percent to GBP 747 (USD 981, EUR 826) each on the news.