North Yorkshire, U.K.-based family-owned seafood business Whitby Seafoods recently pulled out of its purchase of Kilhorne Bay Seafoods due to the resource-heavy process required to finalize the deal.
Whitby Seafoods, the country’s largest scampi producer, announced plans to acquire Northern Ireland-based seafood supplier Kilhorne Bay in August 2023. The U.K. Competition and Markets Authority (CMA) subsequently confirmed it was investigating the planned merger and that a phase 1 decision on the acquisition process would come by 4 October.
With the CMA announcing on that date that it intended to refer the proposed deal for an in-depth phase 2 investigation as part of its merger review process, Whitby Seafoods informed the authority that it wouldn’t be proceeding with its acquisition plan.
“As a Yorkshire-based, family-owned business with a commitment to providing high-quality, excellent value breaded scampi to our customers, the proposed merger was appealing because our values are highly aligned with Kilhorne – a small family-owned company based in Northern Ireland,” Whitby Seafoods stated. “Half of Kilhorne’s scampi sales were in Europe, and this gave Whitby a unique opportunity to build a new market for our business. Sadly, the resources required to engage in a CMA phase 2 investigation are out of all proportion to any potential benefit from the deal, and we have, therefore, withdrawn our offer for Kilhorne and will not be proceeding with the acquisition.”
Inquiry groups – selected for each case from the independent experts appointed by the Secretary of State to the CMA’s panel – typically conduct CMA phase 2 merger investigations. The inquiry group oversees the investigation and makes the decision on whether a merger is likely to lead to a substantial lessening of competition; if so, it suggests appropriate remedies. These investigations are subject to a strict deadline of 24 weeks but can undergo extensions by eight weeks in special circumstances.
The deal, the company said, would have enabled Whitby Seafoods to expand into new markets. Most of Whitby’s sales are based in the U.K., supplying pub chains such as Wetherspoons and Greene King, as well as the supermarket chains Sainsburys, Tesco, Asda, and Morrisons; while Kilhorne has a solid foothold in mainland Europe, supplying the catering, wholesale, and retail trades.
“Whitby Seafoods [was] looking at supplying the peeled scampi market in Europe, and over half of Kilhorne Bay’s customer-base is made up of customers in Europe buying peeled scampi,” Whitby Seafoods Marketing and Sales Director Laura Whittle told SeafoodSource.
Founded in 1985, Whitby Seafoods employs 400 workers across two sites – in the fishing ports of Whitby, North Yorkshire and Kilkeel, Northern Ireland.
Specializing in the supply of wholetail breaded scampi, IQF hand-peeled scampi tails, and king and queen scallops, Annalong, County Down-headquartered Kilhorne Bay has been in business since 1969.
Photo courtesy of Whitby Seafoods
