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Grieg sells Scotland operation to Scottish Sea Farms for £164m

SSF managing director Jim Gallagher:  purchase is a landmark step in the company's long-term strategy. Photo: SSF.
SSF managing director Jim Gallagher: purchase is a landmark step in the company's long-term strategy. Photo: SSF.

Grieg Seafood has agreed to sell its Scotland business, Grieg Seafood Hjaltland UK, to Scottish Sea Farms for £164 million, it announced this evening.

The transaction is subject to certain customary closing conditions. It is expected to close within Q4 2021, depending on processing time with relevant competition authorities.

Scottish Sea Farms – which is co-owned by Norwegian salmon farmers Lerøy and SalMar – said the acquisition is a strategic move to deliver optimal biological performance and help meet rising demand for premium quality, Scottish-grown salmon.

Complementary operations

With sites on Shetland and the Isle of Skye, Grieg currently operates 21 marine farms, a freshwater hatchery and a processing facility, harvesting approximately 16,000 tonnes (HOG) of Atlantic salmon in 2020.

SSF said this complements the geography and nature of its own operations which are located across mainland Scotland, Shetland and Orkney and produced approximately 24,000 tonnes (HOG) of Atlantic salmon in 2020.

SSF chief executive Jim Gallagher said: “As farmers, we are constantly striving to create the best growing conditions for our salmon. The purchase of Grieg Seafood Hjaltland UK is a landmark step in our long-term strategy, giving us greater influence over several key biological factors including fish health, stocking regimes and sea lice management.

“We’re very much looking forward to pairing the skill and know-how of our existing farming and fish health teams with the local expertise within Grieg Seafood Hjaltland UK, working as one to benefit fish welfare and boost survival. This, in turn, will ensure a more secure and stable supply of salmon for our discerning customers the world over, helping satisfy the insatiable demand for this highly nutritious, low carbon food.”

Andreas Kvame:
Andreas Kvame: "We hand over operations in good shape."

Cash deal

The purchase price, which is on a cash and debt free basis, is expected to be financed with 100% cash consideration from Scottish Sea Farms. SalMar said in a Norway stock market announcement that the transaction will be funded with external debt, and new equity from the owners (SalMar and Lerøy).

Grieg chief executive Andreas Kvame said: “The discontinuation of our salmon farming operations in Shetland is part of our communicated strategy, and the disposal represents an important milestone in Grieg Seafood’s strategy to concentrate future farming activities in Norway and Canada, where we see the largest potential for profitable growth.

“Following a three-year long period of restructuring and operational improvement, Shetland is now showing good performance with sea lice levels at an all-time low, increasing survival and a high superior share. I am pleased to say that we hand over operations in good shape.

“I want to sincerely thank all employees of Grieg Seafood Shetland for their impressive efforts, especially during the difficult times of the pandemic. I am confident that the Shetland business will be in good hands and that salmon farming will continue to create value for the local communities in Shetland for years to come.”