Some scenic and small communities in the northern Norwegian counties of Nordland and Finnmark are uneasy following the announcement this week that giant Japanese firm Mitsubishi has launched a bid for Cermaq, the large state-controlled Norwegian salmon farming firm. Rival bidders have a month in which to challenge the offer, and that’s set off uncertainty over the future of one of Northern Norway’s major employers.
Many are skeptical to the NOK 8.88 billion (USD 1.4 billion) takeover bid from Mitsubishi, while others don’t want rival Norwegian firms to set off a bidding battle either. The mayor of Steigen in Nordland, where Cermaq’s Nowegian operations are based, says, though, that since a sale of Cermaq seems inevitable, he prefers the prospective Japanese owners to Norwegian competitors that would likely consolidate Cermaq’s operations into their own.
“Cermaq is absolutely the community’s largest employer, no doubt about that,” Mayor Asle Schrøder of the farmer- and district-friendly Center Party told newspaper Dagens Næringsliv (DN) on Wednesday. Around 100 Steigen residents work for Cermaq at its headquarters at Nordfold in Steigen or at Cermaq’s salmon farming and processing operations.
Schrøder isn’t pleased that the Cermaq board recommends that shareholders, including the state with its 59 percent stake in the company, sell to Mitsubishi but he sees worse alternatives. Mitsubishi offered NOK 96 per share on Monday, a premium of 14 percent over Friday’s closing price on the Oslo Stock Exchange. State officials are positive but open, they say, to considering higher bids.
Cermaq has been in play for the past year, when the former left-center government blocked a takeover bid by rival Marine Harvest, controlled by wealthy shipping tycoon John Fredriksen. The government responded by buying up more Cermaq stock that raised its stake from 43.5 percent to the 59 percent it owns now, after Cermaq’s fish-feed division Ewos was spun off. Former Trade Minister Trond Giske of the Labour Party was accused of “meddling” in the market to protect a major Norwegian company, while now his efforts have ironically led to the company likely being sold to foreign owners.
Schrøder and Cermaq’s Norwegian management think that’s preferable, though, to seeing Cermaq swallowed up by Marine Harvest or other major Norwegian salmon farmers like Salmar or Nordlaks. “I think the headquarters, processing and production would disappear from Steigen if (the Norwegians) buy Cermaq,” he told DN. “I feel more confident that the jobs will stay (in the local communities) with a Japanese owner. Mitsubishi has no salmon farming in Norway today, so couldn’t move things to their own operations.”
Cermaq executives have noted that the salmon can’t swim abroad either. “It would be very difficult to move our operations to another country,” Cermaq’s chief executive Jon Hindar, told newspaper Aftenposten. “Fish farming operates where it’s natural to do so, no matter who owns it.”
Cermaq has around 600 employees in Norway, 3,500 in Chile and 230 in Canada. Marine Harvest, currently caught up in some drama around top management changes among its owners, is considered the most likely to make a rival bid for Cermaq but analysts think the Mitsubishi bid will prevail. Schrøder of the Center Party may also be comforted by the fact that Japan also is known for the sort of district politics and protectionism that his party champions.
“We have no desire for a bidding war over Cermaq,” Schrøder said. “We would rather wish Mitsubishi welcome and make the best out of it.”