A few old salts on the Cape Town docks were knocked of their bollards when fishing conglomerate successfully appealed a judgement by the competition authorities that imposed unworkable (and unviable) conditions on the proposed acquisition of Foodcorp’s fishing assets. On December 19 Oceana confirmed a decision by the Competition Appeal Court to uphold the company’s appeal. This effectively confirmed Oceana’s entitlement to include the pelagic fishing rights in its proposed acquisition of Foodcorp’s fishing assets.
The development was most surprising. Between July and late November most fishing industry pundits would have bet confidently that Oceana would not win the right to snag the valuable pelagic rights, and many were already speculating who the ‘replacement’ buyer for these assets might be.
Oceana acquiring Foodcorp’s fishing business – most notably the business of catching, processing and selling deep-sea trawl hake, south coast lobster and pelagic fish. The only portion excluded from the acquisition is Foodcorp’s west coast lobster and hake long-line fishing rights. Foodcorp’s Glenryck canned pilchards brand was sold to industrial conglomerate Bidvest, which holds a variety of fishing operations in Namibia.
Oceana CEO Francois Kuttel said that in the absence of securing the pelagic fishing rights, the company could have not gone ahead with the deal. He explained that the pelagic fishing rights were a commercial imperative for the acquisition to proceed.
Oceana owns the bestselling Lucky Star canned pilchard brand, and has in recent years resorted to importing a substantial portion of pilchard stocks to fulfil canning capacity. Essentially the R400m deal involves Kuttel said over half of Oceana’s canned pilchards were currently imported from 12 canneries that the company had established internationally.
“We now want to look at replacing some of these imports by using Foodcorp’s pelagic fishing rights.”
He stressed that Oceana had argued from the start that it was best placed to secure Foodcorp’s long-term future.
“This has been a very long and arduous process. What is critical is the sense of security and certainty this now brings to the approximately 1,000 employees of Foodcorp. They have been in a state of limbo since the process first started, which must have been very unsettling for them.”
The importance of the Foodcorp deal is underlined by recent strong moves in Oceana’s share price on the JSE. In mid-October Oceana held a market value of R7,8bn, but at the time of writing this had grown to over R13bn.