Salmon farmer Tassal is set to acquire one of the biggest players in the NSW seafood market, De Costi.
After an examination of De Costi's books, Tassal has drawn up the key terms of a sale agreement, and both companies have agreed to move to a formal sale agreement.
De Costi's owners will receive an undisclosed cash payment and Tassal shares as part of the deal.
The acquisition does not include the sale of De Costi's Sydney Fish Markets store, or two other stores at Bondi and Chatswood.
Also, George Costi will remain in charge of De Costi Seafoods for at least three years.
Mr Costi will report to Tassal chief executive Mark Ryan.
"De Costi Seafoods provided Tassal with an attractive vehicle to deliver the company's salmon and seafood growth strategy, which is about maximising domestic market per capita consumption of seafood," Mr Ryan said.
The seafood market in Australia is worth about $4.3 billion.
The Tassal and De Costi deal is expected to be completed in July, subject to regulatory approvals.
Shares in Tassal gained seven cents to $3.35.
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