China's Joyvio Group, subsidiary of the Chinese conglomerate Legend Holdings Corporation, has put in an offer to buy 100 percent of the shares of Chile's Australis Seafoods for a price of $880 million (€771.7 million).

The acquisition is subject to compliance and must be completed no later than April 2019.

"The target company has the highest production in the XII Region [Magallanes], which has the greatest development potential and extensive natural resources and has much room for its growth in the future," said Joyvio Group.

"It outperforms industry peers in terms of some of the key operational indicators, and is one of the best-run salmon companies in Chile," the group said.

Australis farmed 64,000 metric tons of salmon in 2017, representing 9 percent of the total production in Chile. It reported sales of $399 million (€349.1 million) in 2017 and a net profit of $73.4 million (€64.2 million).

Last year Joyvio snapped up Qingdao-based China Starfish, expanding its seafood footprint into coldwater shrimp and pollock.

In 2016 it also acquired a controlling stake in Australian seafood producer and exporter KB Food International, formerly Kailis Brothers.

Parent company Legend Holdings is also among the rumored candidates for the purchase of Spanish fishing company Iberconsa.

Full integration

Inside Legend Holdings

A Chinese conglomerate grabbed the headlines Sunday with the acquisition of Chilean salmon farmer Australis for $880 million. So just who, exactly, is Legend Holdings?

Chinese firm Legend Holdings is an incredibly diverse holding company with investments in five pillars: IT, financial services, innovative consumption and services, agriculture and food, and advanced manufacturing.

In seafood, the company owns KB Food International, the parent of Australian seafood supplier Kailis Brothers, and controls China-based Qingdao Starfish Food.

With the Australis acquisition, the company now has a direct pipeline for raw material into the Chinese seafood sector, and says it plan on expanding its supply chain even further.

In addition, the company plans on developing an international food brand.

Santiago Stock Exchange-listed Australis Seafoods began as a freshwater smolt producer and expanded to saltwater salmon in 2007, when the company was incorporated as a holding company.

Australis thrived during the Chilean infectious salmon anemia (ISA) crisis and went public in June 2011.

The company integrates all production stages through Australis Agua Dulce (eggs, fry and smolts) and Australis Mar (weight gaining, processing and marketing).

The secondary processing of raw materials takes place through subsidiary Congelados y

Conservas Fitz Roy, at its processing plant located in Calbuco, Xth region, which the company acquired from Cermaq subsidiary Mainstream Chile for $11.7 million (€10 million) in 2013.

In late 2013, Australis formed New World Currents alongside competitors Blumar, Camanchaca and Yadran, an alliance of Chilean salmon producers targeting the Chinese market.

In early 2016, it opened a US import division, Trapananda Seafarms, in Miami.

High return of investment

The limited number of salmon farms in the world and strict licensed operation requirements, together with the high demand of the product and advantages in sustainability and technology were some of the most attractive factors behind the acquisition.

"The scarcity of the resources of salmon is increasingly obvious. The tight balance between global supply and demand makes upstream resources the most valuable link in the whole industry chain," said the group.

"The obtaining of upstream salmon resources will help quickly strengthen the brand and market influence of the seafood businesses of Joyvio and will improve its cash returns and profitability."

A Chinese protein brand

Outside of the seafood arena, Joyvio Group also owns Huawen Food, a leading manufacturing and branding corporation in China, producing fish jerky snacks and soy snacks under the JinZai and BoWeiYuan brands, amongst others.

Huawen sells to consumers via more than 1,000 distributors and 100,000 sales outlets.