October 10, 2016 / 3:11 PM / a year ago

Thai Union buys minority stake in Red Lobster in $575 mln deal

Oct 10 (Reuters) - Thai Union Group PCL, the world’s biggest producer of canned tuna, said on Monday it had bought a minority stake in U.S. seafood chain Red Lobster Seafood Restaurants for $575 million to expand in the United States, its biggest market.

The company, known for its "Chicken of the Sea" tuna brand, said it had taken a 25 percent interest in the restaurant chain, with the option to acquire an additional 24 percent through the conversion of preferred shares. (bit.ly/2dFD7To)

The Thai company paid $230 million for the 25 percent stake, and $345 million for the preferred shares, which are convertible to common stock within 10 years.

Private equity firm Golden Gate Capital will remain Red Lobster’s majority owner and retain operational control, Thai Union said.

Golden Gate Capital acquired Red Lobster for about $2.1 billion in July 2014 from Darden Inc, the parent of the Olive Garden chain of restaurants.

Thai Union has been seeking to boost its business through acquisitions after it scrapped a $1.5 billion deal to buy U.S. rival Bumble Bee Seafoods in December.

The Thai company is a supplier to Red Lobster, as well as Wal-Mart Stores Inc and Costco Wholesale Corp.

Thai Union bought Canadian lobster processor Les Pecheries de Chez Nous for an undisclosed amount earlier this year. (Reporting by Abhijith Ganapavaram in Bengaluru)

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