SalMar (Buy, TP: NOK780.00) - Merging with Norway Royal Salmon
SalMar and Norway Royal Salmon (NRS) have entered into a merger agreement valuing NRS at NOK265.18/share. The merger is conditional on NRS acquiring SalmoNor from NTS at the previously negotiated terms. The merged company would have a harvest potential of more than 160kt in Central Norway, 120kt in Northern Norway, and 50kt in the West Fjords of Iceland, and a leading offshore farming platform. We expect material synergies due to overlapping operations and value chains in all farming regions. Management expects the merger to close in Q3. We reiterate our BUY and NOK780 target price.SalMar is a producer of Atlantic salmon and is integrated from roe and smolt to products and sales. Co. has farming operations in Central and Northern Norway, as well as in Scotland. Co. has operating licences for marinephase fish farms and hatcheries in central Norway and Troms County. Co. has 66 licences for production of farmed Atlantic salmon in Norway: 53 in central Norway (More & Romsdal, South and North Trondelag) and 13 in northern Norway (Troms)
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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