The Chilean salmon industry welcomed the move by Chinese Joyvio Group to acquire Chilean salmon firm Australis for $880 million (€769.8 million).

According to various executives in the industry, the transaction will set the valuation of Chilean salmon companies at the right level in line with prices of Norwegian companies.

“This is very good news for the Chilean industry, when Agrosuper announced the acquisition of AquaChile it was betting for national consolidation, and that was very positive. Now we welcome very much the fact that a Chinese conglomerate is investing in the Chilean industry,” Arturo Clement, president of the Chilean association of salmon farmers Salmon Chile told IntraFish.

“The valuation of Chilean salmon companies is set at the level of Norwegian firms with this transaction,” Ricardo Garcia, CEO of Camanchaca told IntraFish.

“The equity of this transaction including the debt must be around $1 billion (€874.7 million). With a production of 60,000 metric tons a year, this means a value of between $16 (€13.99) and $17 (€14.87) per kilo."

The deal is positive for the industry and should have a positive impact on the value of other Chilean salmon companies, he said.

Multiexport CEO Andres Lyon agreed that the deal is a good sign for the industry and could increase competitiveness.

Booming Chinese demand

Furthermore, executives agree that the entry of a Chinese investor is a clear sign of the growth potential of China in the salmon market.

“The fact that it is a Chinese buyer indicates that they see a potential increase in consumption and internal demand and that they want to participate in this growth,” Lyon told IntraFish.

The move is well in line with the approach of big salmon players setting a bigger foot in China, such as Marine Harvest’s move to open points of sales in the country, and New World Current’s focus on increased supply to the market, Garcia said.

“The entry of Chinese investors reflects the growth potential in the market; they’re securing supply,” Garcia said. “E-commerce is exploding in China in different segments, especially among young adults. In terms of income, population and culinary trends, China could be one of the three most important markets in the world together with the United States and the European Union."

Nicos Nicolaides, CEO of Magallanes-based farming company Nova Austral, told IntraFish the "interesting" arrival of Chinese players proves that the current boost in salmon demand will continue to develop in China.

"I think they are securing supply with this move, that could result in a reduction of supply to the United States and Europe, which could increase prices in these markets," Nicolaides said.

Although some sources argue now that the valuation of Australis is a sign that Agrosuper’s acquisition of AquaChile for $850 million was a very good deal for Agrosuper, while AquaChile could have gotten a higher price for the company, an unnamed source told IntraFish that considering the debt of the companies the transaction of AquaChile was closed at the right price.

Aquaculture

Top execs: Australis acquisition sets valuation of Chilean salmon companies at the right level