Seafood merger sinks after public outcry

Two of Canada's largest seafood companies have cancelled a proposed merger that had riled many fishing villages concerned about lost jobs.

Clearwater Fine Foods Inc., of Nova Scotia, and Fishery Products International (FPI), of Newfoundland, announced Friday that the $510 million deal is off.

"We have notified FPI that we are stopping our efforts to finalize this acquisition," John Risley, president and CEO of Clearwater, said in a news release. "FPI has agreed that it is best to not go forward in the current environment."

The cancellation is a "missed opportunity," according to Derrick Rowe of FPI. "The acquisition of Clearwater would have strengthened" both companies, he said in a statement.

The merger, first proposed in September, would have cost hundreds of jobs at three fish plants along the southern coast of Newfoundland. Word of impending layoffs sparked fierce opposition to the plan during the fall and winter.

• RELATED STORY: FPI, Clearwater combine to form East Coast fishing giant

The government of Newfoundland responded by threatening to pass legislation to block the purchase of Clearwater, even though Rowe backed away from previously announced job cuts in Marystown, Harbour Breton and Fortune.

Tempers flared at public hearings last month. Former federal fisheries minister John Crosbie was shouted down by hundreds of fish-plant workers furious that FPI might abandon them after the merger.

• FROM JAN. 29, 2002: Crosbie booed, heckled at FPI hearings

Risley said he's disappointed the deal fell through. "Together, FPI and Clearwater would have been a great platform for growth," he said.

"This would have been a good transaction for both companies. But the events of the last few weeks have made it difficult to proceed. Both (Clearwater) and FPI have to get back to the business of running their own companies well."

The Fish, Food and Allied Workers union in Newfoundland expressed relief Friday over the decision to scrap the merger.