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Weekly Overview: Tassal Gains Bigger Market Share Through De Costi Seafoods Acquisition

Lucy Towers
07 July 2015, at 1:00am

ANALYSIS - There has been more movement in the markets this week as the Tasmanian salmon farming company Tassal announced it is to buy De Costi Seafoods in order to gain a bigger share of Australia's seafood market.

"The proposed acquisition of De Costi Seafoods will further build on our domestic salmon capabilities, increase Tassal's vertical integration in salmon, drive increased scale and provide Tassal with access to the broader seafood market," Tassal managing director Mark Ryan said.

The Financial Review noted that Tassal will buy the company for $50 million which is five times De Costi's current annual earnings. Tassal will then also pay a "growth-based earn-out component" through the issuance of new shares to De Costi over three years.  

New research from the US National Oceanic and Atmospheric Administration (NOAA), University of Alaska and an Alaskan shellfish hatchery has discovered that ocean acidification may make it difficult for Alaskan coastal waters to support shellfish hatcheries by 2040.

Costly mitigation efforts may be needed to modify seawater used in the hatcheries to prevent this. 

The waters off Alaska are especially vulnerable to ocean acidification because the absorption of human-caused carbon dioxide emissions is not the only process contributing to acidity.

Melting glaciers, upwelling of carbon-dioxide rich deep waters, the natural decomposition of plant-life that gives off carbon dioxide and the fact that cold water more readily absorbs carbon dioxide all exacerbate ocean acidification in the region. 

In disease news, another case of Infectious Salmon Anaemia has been detected in the Aysen region of Chile.

This outbreak effected a Blumar salmon farm and the National Fisheries and Aquaculture Service (Sernapesca) reported that it is a new variant of the HPR0 strain, resulting in sequencing of the HPR 8 variant.