Tuna Leaders Call Off Acquisition

Thai Union Group PCL, a large international seafood producer, on Thursday canned its proposed $1.5 billion acquisition of U.S. rival Bumble Bee Seafoods, following antitrust objections from the Justice Department.

Thai Union, which holds the Chicken of the Sea brand, said that it and Bumble Bee had vigorously advocated the deal's merits to U.S. antitrust enforcers, but concluded that antitrust approval was unlikely under the time frame stipulated in the transaction.

"We have decided to focus our energy on our existing business. Thai Union remains committed to the North American seafood market," said the company's president, Thiraphong Chansiri.

The Justice Department's antitrust division said it had serious concerns about the deal because it would have combined the second- and third-largest sellers of shelf-stable tuna in the U.S. The StarKist Co. brand leads the U.S. market in canned tuna, followed by Bumble Bee and Chicken of the Sea, respectively.

"Consumers are better off without this deal," said Bill Baer, the department's antitrust chief. "Our investigation convinced us—and the parties knew or should have known from the get-go—that the market is not functioning competitively today, and further consolidation would only make things worse."

The companies had announced their deal last December. Thai Union had said the acquisition would help it improve operating efficiency and advance innovation and product development, especially in North American markets.

The company's announcement of the termination came Friday morning Bangkok time, since Asia is ahead of the U.S. time zones.

Bumble Bee is owned by private-equity firm Lion Capital LLP. Thai Union said it and Lion Capital mutually agreed to abandon the deal. Representatives for Bumble Bee didn't immediately respond to a request for comment.

The development is the latest evidence that U.S. antitrust enforcers continue to be active in objecting to deals they believe will lead to unacceptable levels of market concentration. Other transactions that have fallen this year after the government objected include Comcast Corp.'s bid for Time Warner Cable Inc., Sysco Corp.'s bid for rival food distributor US Foods Inc. and a semiconductor industry deal between Applied Materials Inc. and Tokyo Electron Ltd.

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(END) Dow Jones Newswires

December 04, 2015 01:25 ET (06:25 GMT)

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