Thai Union Group, the maker of the U.S. "Chicken of the Sea" brand, is abandoning its proposed $1.5 billion purchase of Bumble Bee Seafoods after U.S. officials objected to the merger, saying it would harm competition.
"Over the course of last twelve months, both Thai Union and Lion Capital have vigorously advocated the merits of the deal to the U.S. Department of Justice," Thai Union said in a statement Friday. "However, Thai Union and Lion Capital have concluded that the clearance is unlikely under the time stipulated in the share purchase agreement."
"Consumers are better off without this deal," Bill Baer, assistant attorney general of the U.S. Department of Justice's anti-trust division, said in a statement. "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."
The unraveling of the agreement comes nearly a year after it was announced, and as the European Union considers whether to impose an EU seafood import ban on Thailand for failing to crackdown on illegal and unregulated fishing. An EU decision is expected this month.
The U.S. State Department in July blacklisted Thailand for a second consecutive year for not doing enough to fight modern-day slavery. A July 28 report from the department labeled labor abuses in the Southeast Asian country's seafood sector persistent, abusive and largely ignored by the Thai government.
News of the deal's demise was applauded by environmental activist group Greenpeace.
"Thai Union has been linked to far too many serious labor abuses and destructive fishing practices to be taking on new brands without sorting out its existing problems," Greenpeace USA Oceans campaigner Kate Melges, said in a statement. "It is high time Thai Union cleans up its supply chains and uses its huge purchasing power to stamp out labor abuses and destructive fishing from the Thai fishing industry."
Thai Union, a publicly-held Thai corporation headquartered in Samutsakhon, Thailand, is the largest global producer of shelf-stable tuna and also offers other shelf-stable and frozen seafood products globally. Thai Union's Chicken of the Sea subsidiary is headquartered in San Diego, California.
Bumble Bee, also headquartered in San Diego, is owned by privately-held Lion Capital.
"During the last year, Bumble Bee has conducted business as usual and now has a renewed focus to execute its vision," Bumble Bee CEO Chris Lischewski, said in an emailed statement. "Lion Capital has been a great partner and we look forward to continuing to work with them."