China’s tuna sector’s woes have led to the cancelation of a takeover of leading tuna-fishing firm Dalian Yuan Yang Yu Ye Tuna Longline Co by condiment producer Jiajia.
The company, which sometimes uses the English names Dalian Ocean Fishing Co and China Tuna, was the focus of a CNY 4.6 billion (USD 700 million, EUR 600 million) takeover bid by a leading soy processor and distributor, Jia Jia Food Group.
Jiajia, which produces soy sauce, vinegar, and oyster sauce under the Jiajia and Panzhongcan brand names, threatened to upend China’s tuna industry with its pledge to use its marketing and distribution network to widen tuna sales.
But Jiajia appears to have been scared off by the collapse in profitability in the tuna sector in the past two years due to oversupply, as many Chinese firms expanded their distant-water tuna fleets. Weaker consumer demand in key markets like Japan this year worsened matters for China’s main tuna players. Jiajia has also attracted attention from China’s securities regulators over the past year, a factor which may have forced the firm’s decision, even though this is not stated in the official Jiajia announcement announcing its abandonment of the deal.
Dalian Ocean Fishing Co. currently counts the Japan-based Mitsubishi conglomerate as its biggest customer. Established in 2000, the firm claims to be the largest ultra-low temperature longline premium tuna fishing company in China in revenue and sales volume, and the largest in fleet size. It also says it operates China’s first fully fiber-glass low-temperature tuna longline vessels – the Long Xing 801 and Long Xing 802.
In a statement to investors, Jiajia said it would focus on the condiment market moving forward. The failed takeover will be good news for Dalian Ocean Fishing competitors like CNFC Overseas Fishery Co Ltd, the listed arm of China National Fisheries Co, which said recently it’s using a stock market bull run to raise over CNY 400 million (USD 60 million, EUR 52 million) cash for new tuna vessels and processing capacity.
