Merging Maruha and Nichiro into Maruha Nichiro Holdings (2006)

What it means to acquire scale

To see this merger as no more than a reorganisation in which the two strongest firms in seafood added up their numbers to gain scale is to catch only half of it. President Igarashi Yuji of Maruha Group stated flatly that, facing a shrinking market and dwindling resources, finding growth opportunities alone within Japan was extremely difficult — the incoming head himself acknowledging the maturity of the market head-on. The colouring of a finance-led deal, led by a president who came from the old Industrial Bank of Japan, is strong; but the core of a judgement that bound together two seafood histories, Maruha’s 127 years and Nichiro’s 100, appears to lie in looking squarely at a ceiling on demand.

That said, one can call the merger fruitful only because one knows what followed. Events that damaged trust came one after another — mislabelling of origin around the time of the launch, the Aqli Foods pesticide contamination at the end of 2013 — and the unification of the operating companies was put off until 2014. The scale of a trillion yen in sales was eventually reached, yet the margin in frozen food does not match that of Nichirei, and the fruit the merger was supposed to promise still leaves work to do. What one earns after aligning the scale can be seen as what finally decides the success or failure of consolidation in seafood.