Thai Union Group, the world’s largest canned tuna producer, has decided to scrap its $1.5 billion acquisition of U.S.-based Bumble Bee Seafoods from Lion Capital, after U.S. regulators refused the deal based on the threat it poses to competition in the market.

 

If approved, the deal would have given the group control of two of the top tuna brands in the U.S. market, which has long been controlled by only three brands.

 

Since its announcement on December 19, 2014, Thai Union and Lion Capital have worked doggedly to gain approval from the U.S. Department of Justice for the deal, but as doubt about receiving approval grew, the group decided to walk away from the deal.

 

The department released a statement stating its reservations and ‘serious concerns’ about allowing the deal, with Bill Baer, assistant attorney general of the U.S. Department of Justice’s anti-trust division concluding, “Consumers are better off without the deal.”

 

"Our investigation convinced us – and the parties knew or should have known from the get go – that the market is not functioning competitively today and further consolidation would only make things worse."

 

As part of its negotiations to gain clearance for the acquisition, Thai Union had previously stated that if allowed to purchase Bumble Bee Seafoods, it would sell its San Diego-based Chicken of the Sea unit which reported over $400 million in revenue in 2013, but states now that no such plans are being considered.

 

The Bumble Bee acquisition was part of Thai Union’s strategic plan to reach revenue of $8 billion – a plan that is still in place for the group. Thai Union chief executive, Thiraphong Chansiri told Reuters by telephone, "We will have cash to buy other companies," adding, "This will help us reach the 2020 target."