Mowi's Strategic Acquisition: Boosting Ownership in Nova Sea to 95%

Mowi ASA, one of the world's leading seafood companies and the largest producer of farm-raised Atlantic salmon, has announced a strategic acquisition to increase its ownership in Nova Sea AS from 49% to 95%. This move is set to strengthen Mowi's position in the global salmon farming industry and drive long-term growth and profitability. The transaction values 100% of the equity in Nova Sea at NOK 16.0 billion (EUR 1.36 billion), with Mowi paying NOK 7.4 billion (EUR 625 million) for Vigner Olaisen's 46% stake through a 30% settlement in Mowi shares and 70% in cash.

The acquisition of Nova Sea's controlling stake aligns with Mowi's overall investment philosophy, focusing on stability, predictability, and consistent growth. By combining their operations, Mowi and Nova Sea will have a leading presence in Northern Norway, with an expected harvest volume of 157,000 tonnes of salmon in this region in 2025. This will strengthen Mowi's position in one of the world's best areas for salmon farming, ensuring consistent growth and stability.

Mowi anticipates several strategic benefits from increasing its ownership in Nova Sea, including synergies, improved biological performance, and enhanced market position. The integration is expected to yield significant synergies, including improved capacity utilisation by leveraging the location portfolio in Region North and further strengthening biological performance through investments aimed at improving fish health. Preliminary synergy estimates are in the range of NOK 400 million on an annual basis.

By combining their operations, Mowi and Nova Sea can invest in further improving biological performance and fish health. This can lead to higher survival rates, reduced disease incidents, and better fish welfare, ultimately resulting in increased harvest volumes and improved profitability. The enhanced market position will enable Mowi and Nova Sea to better negotiate prices, secure better market access, and increase their bargaining power with suppliers and customers.

The acquisition is expected to be immediately EPS accretive, even before potential synergies, and is valued at an EV/EBIT of 9x if applying 3-years average margins for Mowi Norway Region North on Nova Sea’s expected harvest volumes. This indicates that the acquisition is expected to be a valuable addition to Mowi's portfolio, with a reasonable valuation multiple considering the expected synergies and growth potential.

Mowi's CEO, Ivan Vindheim, expressed his enthusiasm for the acquisition, stating, "Nova Sea is a frontrunner in the Norwegian aquaculture industry and is known for its excellent biological performance and industry-leading margins. Over 50 years, the company and the Olaisen family have invested in the organisation and developed it into an impressive, fully integrated operation. It is therefore with great pleasure that we are now, after 30 years, combining our operations."

In conclusion, Mowi's strategic acquisition of Nova Sea's controlling stake is a well-thought-out move that aligns with the company's investment philosophy and is expected to drive long-term growth and profitability. The synergies, improved biological performance, and enhanced market position will enable Mowi to strengthen its position in the global salmon farming industry and create more value and jobs in Nordland over time.