Chicken of the Sea, Bumble Bee merger called off

The tuna giants behind the brands Chicken of the Sea and Bumble Bee have abandoned their plans to merge after the U.S. government signaled its opposition to the deal.

Thai Union Group, which controls San Diego-based Chicken of the Sea and other brands such as Van Camps and Genova, had agreed to acquire Bumble Bee Foods for $1.5 billion from British private equity firm Lion Capital LLP in December 2014.

But the deal fell apart after the U.S. Justice Department raised concerns about the combined U.S. market share the companies would have in shelf-stable tuna following the deal.

Thailand-based Thai Union is the second largest seller of the product in the U.S., while San Diego-based Bumble Bee is the third largest, according to the government.

“Consumers are better off without this deal,” U.S. Assistant Attorney General Bill Baer, a member of the department’s Antitrust 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 rival tuna sellers confirmed that they had mutually agreed to call off the deal.

The companies “vigorously advocated the merits of the deal to the U.S. Department of Justice,” Thai Union said in a statement, but “have concluded that the clearance is unlikely” within the time allocated under the terms of the deal.

Bumble Bee CEO Chris Lischewski said in a statement that the company has “conducted business as usual” since the team was first announced and “now has a renewed focus to execute its vision for the company well into the future.”

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.