Legend Holdings’ Joyvio Group to buy Australis Seafoods for USD 880 million

Chinese foodservice giant Joyvio, a subsidiary of Legend Holdings, announced on Sunday, 18 November that it will buy Australis Seafoods for USD 880 million (EUR 770 million).

Santiago, Chile-based Australis produced 64,000 metric tons of salmon last year – approximately nine percent of the country’s total salmon output – grown primarily in farms in southern Chilean Patagonia. It recorded USD 399 million (EUR 349 million) in sales and USD 73.4 million (EUR 64.2 million) in profit in 2017. 

Australis is traded publicly on the Santiago Stock Exchange, and in its announcement Joyvio said it had entered into an agreement to purchase 94.47 percent of the company’s shares. Word of the agreement sent Australis shares up more than 25 percent to reach CLP 80 (USD 0.12, EUR 0.10) in Monday morning trading on the Santiago Stock Exchange.

Legend Holdings totaled nearly USD 47 billion (EUR 70.4 billion) in sales in 2017, ranking it in the top 700 largest companies in the world. Joyvio Group has a focus on fresh fruit and animal protein, and recently turned toward fresh seafood as an opportunity in the Chinese market. 

“Joyvio Group has successfully established a domestic and overseas seafood industry presence and the acquisition of [Australis] will significantly facilitate the comprehensive implementation of [its] full seafood strategies,” the company said in a release. “[Australis] is a Chilean company with sound corporate governance, an outstanding management team, leading performance indicators in the industry, a great reputation, and strong profitability. It owns a number of licenses in the XII region in Chile which has the greatest development potential and extensive natural resources, and is the company in the XII region with the highest production, which still has much room for its growth in the future.”

Joyvio said it sees salmon as a potentially huge opportunity in China’s domestic market and internationally.

“Salmon is the most recognized seafood category for consumers worldwide with high nutritional value, high adaptability in taste and easy to cook. Salmon can be supplied throughout a year, which represents an unparalleled advantage in terms of industry standard, technology leadership and sustainability. It is a mandatory food for major retailers and restaurants and the type of seafood with highest operational value. Due to limited breeding farms in the world and licensed operation requirements, the scarcity of the resources of salmon is increasingly obvious. The tight balance between global supply and demand makes upstream resources the most valuable link in the whole industry chain,” Joyvio said. “The obtaining of upstream salmon resources will help quickly strengthen the brand and market influence of the seafood businesses of Joyvio Group and will improve its cash returns and profitability. As the most important strategic market of Joyvio Group, PRC has a great room for its consumption growth both in width and depth. The existing domestic and overseas presence and resources of Joyvio Group will generate synergies with [Australis] in a number of dimensions and enable [it] to achieve faster and better corporate development. In addition, the acquisition of global high-quality marine protein resources which are in short supply in the PRC is of significant importance in terms of upgrading China’s food consumption and the complementary advantages between China and Chile under the ‘Belt and Road’ initiative.”

Australis’ acquisition follows on several other large deals for Chilean salmon producers. This summer, Chilean protein firm Agrosuper’s subsidiary Los Fiordos purchased Friosur for USD 229 million (EUR 196.4 million), while AquaChile acquired Salmones Magallanes and Pesquera Eden for USD 255 million (EUR 218.4 million). In August, Agrosuper went bigger and purchased a majority interest in AquaChile in a deal worth USD 850 million (EUR 736.4 million).