Norwegian aquaculture giant NTS is moving ahead with plans to merge its salmon farming subsidiaries Norway Royal Salmon (NRS) and SalmoNor, first announced in September.

NRS announced Tuesday it has entered into a share purchase agreement to acquire 100 percent of the shares in SalmoNor from NTS, creating the world's sixth largest salmon farmer with the potential to produce around 100,000 metric tons of salmon in Norway and 24,000 metric tons in Iceland.

The agreement follows an announcement on Sept. 30 when NTS initiated a strategic dialogue on a potential merger of SalmoNor and NRS.

The deal values SalmoNor at an enterprise value (EV) of NOK 8,297 million (€828.7 million/$939.2 million), while the purchase price at the time of closing is estimated to be around NOK 6,350 million (€634.2 million/$718.8 million).

The transaction will be financed through 68.14 percent of shares in NRS and 31.86 percent in cash, which is expected to be fully or partially financed through an external private placement in NRS.

Significant potential

SalmoNor is a fully integrated salmon farming company with licenses in central Norway and with an estimated harvesting volume of 36,500 metric tons in 2022 and 39,000 metric tons in 2023.

NRS said it sees "significant potential" in combining the two companies.

"We are enthusiastic over a combination with SalmoNor," said Klaus Hatlebrekke, interim CEO at NRS.

The merger will combine operational competency across the organizations, he added, which is "the most important foundation for continued growth and development."

Trude Olafsen, an independent board member in NRS, said the transaction creates a company of considerable size, "that will be in the forefront when the future of salmon farming will be formed, enabling further growth and development in the central and north of Norway."

An independent investment bank is engaged by the independent board in NRS to present a fairness opinion on the value of SalmoNor in the transaction.

NRS expects to publish the outcome of this fairness opinion on Jan. 13.

Norwegian aquaculture group NTS acquired 68 percent of the shares in Norway Royal Salmon (NRS) in August following a bidding war with SalMar for ownership of the company.

Earlier in June, NTS won another bidding war, this time for the salmon farmer SalmoNor, and announced at the time it would be merging its operations with those of its wholly-owned subsidiary Midt-Norsk Havbruk.