American Seafoods sold to U.S. group
Seattle Times business reporter
Two years after the passage of a law limiting foreign investment in the region's trawling industry, a group of U.S. investors led by Centre Partners Management yesterday said it was acquiring American Seafoods, a Seattle-based subsidiary of Norwegian Aker RGI.
The $485 million deal will create two new companies, American Seafoods Group and American Seafood International. They will have more than 800 employees and annual sales of $300 million. There will be no layoffs, said Bernt Bodal, a former president of American Seafoods who will serve as chairman of American Seafoods Group.
By selling to New York-based Centre Partners, American Seafoods meets a key requirement of the American Fisheries Act, a 1998 law requiring 75 percent U.S. ownership of all trawling companies by 2001.
At the time, the legislation, drafted by Sen. Ted Stevens, R-Alaska, was the source of bitter acrimony between Alaska and Washington, pitting Alaskan shore-based processing plants against trawling companies in Seattle for control of the $1 billion pollock industry.
Trawling companies such as American Seafoods are mostly foreign-owned and have traditionally dominated the rich pollock fisheries off the Alaskan coast. Opponents of Stevens' bill, led by Sen. Slade Gorton, R-Wash., argued the act would effectively expel the trawlers from U.S. fishing waters, eliminating thousands of jobs in Washington.
American Seafoods, the largest of the trawling companies, with a 17 percent stake in the fishing grounds, would have been among the hardest hit. The company employs hundreds of workers in the Seattle area and pumps millions of dollars every year into local shipping yards and suppliers.
"The bill was certainly more onerous than what was eventually passed," said Bodal.
Under a compromise hammered out between Stevens and Gorton, trawling companies were allowed to retain a 40 percent share of the fisheries with 50 percent going to the processing plants. The remaining 10 percent went to other ships that buy and process fish at sea.
The plan also called for the creation of fishing cooperatives, which would regulate the volume of catches and divide it equally among members. American Seafoods did just that, joining the Pollock Conservation Cooperative along with such companies as Glacier Fish and Starbound. The cooperative worked well for the company, Bodal said.
But the key part of the bill - Stevens' 75 percent rule - remained intact. That left American Seafoods officials scrambling to find an American owner.
In May 1999, American Seafoods approached Tyson Foods, which already owned Seattle-based Arctic Alaska Fisheries. But the deal fell through, and Tyson, which lost millions of dollars in the venture, eventually sold its fishing unit to Trident Seafoods.
The following month, the company began talks with Centre Partners.
Bodal, who resigned as American Seafoods president to focus on finishing the deal, said the sale will allow the new group to be a more integrated seafood company. In addition to trawlers, American Seafoods also will own several processing plants. It plans to expand into new markets such as restaurants and club stores.
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