Marine Harvest has officially completed the acquisition of Canadian salmon farmer Northern Harvest Sea Farms, despite initial fears that competition regulators would raise concerns.

Norway’s Marine Harvest closed the deal, first reported by Undercurrent News and announced in December 2017, effective July 3, the company said in a securities filing.

Last month, Marine Harvest, the world’s largest salmon farmer, received a “no-action letter” from Canada’s Competition Bureau, paving the way for a sale.

“This means that we can proceed with closing the transaction,” Marine Harvest said in the filing.

In April, Undercurrent reported that Marine Harvest CEO Alf-Helge Aarskog, did not foresee regulators taking issue with his company’s plan to acquire Northern Harvest, which has salmon aquaculture operations in the Canadian provinces of New Brunswick and Newfoundland and Labrador.

In fact, Aarskog has said the deal will increase competition, not reduce it.

We don’t know when it [the Northern Harvest deal] will be approved. We have our timelines and the competition bureau will, in due course, do its job,” Aarskog told Undercurrentearlier this year.

“If the deal goes through on the east side of Canada, we have the possibility to grow. We have the hatchery. We didn’t get the smolt with the Gray [Aqua Group] acquisition, so it [getting Northern Harvest] was important to get access to smolt. It’s very hard to get the eggs for Newfoundland. They have narrow criteria,” said Aarskog.

The announcement of the deal was soon after followed by news that Northern Harvest was experiencing issues with infectious salmon anemia (ISA).

“We believe that this acquisition will increase competition. More salmon will be produced and thus more salmon for the consumer.  Marine Harvest does not have production on the east coast, in practical terms Canadian fish produced on the east coast is sold on the east coast and salmon produced on the west coast is sold on the west coast,” he said.

Back in January, analysts and industry sources told Undercurrent that they felt the CAD 315 million ($248m) deal could fall afoul of the country’s competition authority, however. That’s if the powers that be assess the salmon sector on a national, not coastal basis. At the time, Marine Harvest did not respond to a request for comment from Undercurrent.

The company does not currently farm at all on the east coast of Canada but has been acquisitive in order to build a sizable operation in the Maritimes.

At the start of 2017, Marine Harvest acquired Gray Aqua Group, which currently holds nine licenses on the east coast of Canada. Marine Harvest has said it plans to build an organization capable of producing 15,000-20,000 metric tons per year with the assets in Newfoundland.

If the Northern Harvest deal is approved, the company plans to combine the two as Marine Harvest Atlantic.

The teaser circulated in the sale process for Northern Harvest gave 13,770t as the estimated production level for 2017, with the targets for 2018 and 2019 17,877t and 19,573t, respectively.

On the west coast of Canada, Marine Harvest produced 39,000t in 2017. Its target for Canadian production for 2018 is 46,000t.

The total Canadian production for 2017 is forecast to be 137,000t and 146,000t in 2018.

So, even adding Northern Harvest to this and excluding the longer-term plans with Gray, Marine Harvest would have over 40% of total Canadian production.

Northern Harvest growth potential

According to the Northern Harvest sale teaser, the company has scope to expand its production to as much as 40,000t on its current licenses.

Northern Harvest owns in aggregate 45 licenses in two regions on the east coast of Canada, with 33 licenses in Newfoundland and 12 licenses in New Brunswick.

According to the teaser, which is from July, addition 13 additional licenses have been applied for and Northern Harvest’s management expects at least three new approvals in the coming 12 months.

Northern Harvest currently has a harvest capacity of 25,000t with existing licenses and infrastructure, according to the teaser.

A large part of the projected growth is already in the water with biomass equal to 20,000t harvest in 2019.