(Yicai Global) July 5 -- Shanghai Kaichuang Marine International plans to acquire a 100 percent stake in French Creek Seafood, a Canadian Seafood processor headquartered in Parksville in the country's Pacific province of British Columbia, in two stages. The acquisition will help the company expand its share of international fishery resources to cater to China's growing demand.

Kaichuang Marine, a Shanghai-headquartered deep sea fishing company and seafood processor, will close the deal through its wholly-owned subsidiary Shanghai Kaichuang Deepsea Fisheries, it said in an announcement yesterday.

Kaichuang Deepsea will acquire a 70 percent stake from the McLean family that wholly owns the target firm at present for CAD7.7 million in the first stage, and the remaining 30 percent stake within five years, at the latest, per the preliminary agreement. The price will be negotiated per the target's actual operations at that time.

The target company mainly buys, processes and sells seafood from the coast of Canada and the US state of Alaska. Its offering includes salmon, albacore tuna, spot prawns and ground fish. The firm has built up stable sales channels in North America, China and Japan.

The parties have not officially signed the Share Purchase Agreement yet, as details of relevant clauses are still under negotiation. The board of directors has authorized Xie Feng, the firm's chief executive, to make non-material amendments to the agreement based on the actual situation and in the best interests of the company before it is officially signed.

This acquisition will help optimize the company's product portfolio, obtain mature management and sales networks, expand its business to the downstream chain in the deep-sea fishing sector, achieve its development strategy of 'expanding business globally while importing goods back to China,' the announcement added.

Kaichuang Deepsea has the largest tuna seine and trawler fleets in China. It mainly specializes in deep-sea fishing, aquatic product processing and sales, and trading. Its ships have a deadweight tonnage of 39,400 and an annual fishing capacity of 130,000 tons, its website shows.

The company's wholly-owned sub-subsidiary Pan Pacific Fisheries (Marshall Islands) registered in the Republic of the Marshall Islands, plans to purchase three newly-built tuna seine ships from Fujian Mawei Shipbuilding at a price of USD20.58 million per ship -- USD61.75 million in total -- to expand its fleet, enhance its fishing capacity and boost its catches.

Editor: Ben Armour