Codfarmers ASA (COD) and Atlantic Cod Farms AS (ACF) have entered into a letter of intent for the two companies to merge.
The transaction will be structured as a share for share exchange, under which the ACF shareholders will receive COD shares as consideration for their ACF shares. Based on the agreed exchange ratio and assuming 100% acceptance from the ACF shareholders, the COD shareholders and the ACF shareholders will own 51.1% and 48.9%, respectively, of the combined company.
The parties expect that the transaction will be completed in August 2011 and that the rights issue will be completed in September 2011.
A new Board of Directors will be elected with effect from completion of the transaction reflecting the new shareholder structure. Harald Dahl will be the CEO of the combined company.
COD and ACF are the two leading companies in the Norwegian cod farming industry. COD has its production facilities in Nordland, while ACF has its corresponding facilities in Sunnmøre. The companies have their facilities in the regions that are most suitable for cod farming. The combined company will have capacity to produce 20,000t of farmed cod per year.
The companies have through the merger discussions identified substantial industrial synergies with respect to costs, competence and market. The combination will strengthen the companies’ ability to release more juveniles into sea and maintain hatchery, juveniles and farming production in both geographic regions. In addition, the combination will reduce the biological risk by the geographical spread of the facilities.
The corporate head office and sale/marketing will be located in Oslo, while the operational management of the company’s biological production will continue to be located in the area of the production facilities. This is expected to lead to reduced operating expenses for the combined company.
