Daily Newsletter

20 September 2023

Daily Newsletter

20 September 2023

StarKist owner Dongwon Group ‘mulls IPO option for US tuna business’

The IPO is said to be one of three being considered by the South Korea conglomerate.

Simon Harvey

South Korea’s Dongwon Group is reportedly mulling an IPO for its US seafood arm StarKist Co.

Dongwon Industries, the group’s seafood subsidiary, is seeking to raise funds to finance the acquisition of South Korean shipping company HMM, with a public share offering of StarKist one of three IPO options being considered, according to the local publication Pulse News.

The shipping deal is expected to cost around won 5trln ($3.7bn), Pulse News reported, citing unnamed sources as saying Dongwon Industries may first explore the IPO landscape and seek to attract investment funds before any potential listing, including ‘liquidating family owners’ stakes in several companies’.

Just Food has approached Virginia-based StarKist for comment on the IPO speculation. As well as canned tuna, the company supplies single-serve pouches such as the StarKist Creations brand. A new president and CEO was recently appointed, with Chae-Ung Um taking up those roles at the start of 2023.

Pulse News suggested the other IPOs being considered may include the logistics company Dongwon LOEX and Dongwon Home Food, a subsidiary of Dongwon F&B. Dongwon Home Food supplies a range of sauces, dressings, spices and meats to the foodservice channel and B2B customers.

Dongwon Group acquired StarKist in 2008 from Del Monte Foods for $363m at the time, creating one of the world’s largest canned tuna businesses.

StarKist was implicated in a price-fixing scandal in 2017 and later pleaded guilty to the charges. Stephen Hodge, a former senior vice president of sales, put in a guilty plea the same year, with StarKist following suit in 2018.

Allegations tuna suppliers in the US had fixed prices first emerged in 2015. Another canned tuna supplier, Bumble Bee Foods, agreed to plead guilty to one count of fixing prices and to pay a fine, while two Bumble Bee executives also agreed to issue guilty pleas.

In September 2017, seafood giant Thai Union Group confirmed it was the whistleblower in the US price-fixing investigation.

Food industry in Eastern Europe is highly fragmented

Per GlobalData estimates, the Eastern European food industry was valued at $180.5 billion in 2022 and is projected to grow at a CAGR of >4% by 2027. The top five companies together account for a value share of just 5.3% in 2022, with Mondelēz leading the pack. The Czech Republic, Poland, Romania, and Hungary were identified as high-potential countries, primarily due to the large size of their food industries, their high projected value growth rates, and their rising per capita expenditure.

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