BREAKING NEWS!: Dongwong Candidate To Buy StarKist Tuna ff

Seafood companies in Korea, Singapore, Hong Kong and Japan may look at acquiring food businesses in the US, according to sector sources interviewed by mergermarket. 

In light of news that California-based Del Monte Foods has retained Merrill Lynch to sell its StarKist canned tuna business, as reported by this news service, companies interviewed in Korea, Singapore and Hong Kong said they could be interested in StarKist or other food expansion opportunities in the US.

Dongwon F&B Co, the listed Korean food products provider, could consider canned food buys in the US, a company source said. Dongwon F&B produces and distributes frozen, chilled or room temperature foods. It reported sales of USD 732.6m in 2006.

The estimated deal size for the StarKist business would likely be north of the USD 181m market cap of Dongwon F&B, but the Korean company is under the umbrella of Dongwon Group, a large conglomerate. The company source at Dongwon F&B said it could handle a USD 300m deal.

Dongwon F&B’s canned tuna products had 75.2% of domestic market share as of Q307, according to a report submitted to Korean Financial Supervisory Service on 14 November, 2007.

Meanwhile, Yeo Hiap Seng Limited (YHS), the Singapore-listed F&B Company that produces canned products, may have an interest in StarKist or other food business expansion opportunities, a company source said. YHS currently produces canned chicken products in Malaysia, primarily for export. The source added that YHS has no canned fish business yet and would welcome suggestions for potential acquisitions. YHS has a market cap of approximately SGD 394.53m, or USD 275m.

A European sector banker also said Mitsubishi, the listed Japanese conglomerate, had canning operations in Europe and would likely take a look at StarKist, given the familiarity with the category. Among its investments, Mitsubishi Living Essentials Group holds Princes, a UK based producer and distributor of bottled and canned products. A spokesperson for Mitsubishi could not comment on any interest in StarKist.

An analyst covering the food industry in Southeast Asia also suggested that there would be more potential bidders in Japan and Korea, as the tuna fish market is more developed in those two countries.

The analyst added that Pacific Andes, the Hong Kong-listed frozen seafood producer, is one of the main fishery businesses based in Asia, and could fit with StarKist.

According to a report from this new service on 21 November, a spokesperson for Pacific Andes said the company is always looking for acquisitions. The company was not available to comment regarding a potential acquisition of Starkist. Pacific Andes has approximately HKD 3.45bn, or USD 442m, in market capitalization.