Early studies of economies of scale show that ownership limitations imposed large costs on salmon farming firms prior to the deregulation of the industry in 1991. Since then a number of mergers and acquisitions have taken place and the industry has become far more concentrated. Despite this, a number of smaller firms remain in the industry, and in recent years, industry concentration has stagnated. From 1996 to 2012, the ten largest companies increased their production share from 18.9% to 69.1%. Since then, it has remained stable at this level (68.9% in 2015). According to survey data from the Norwegian Directorate of Fisheries, medium-sized firms currently have lower variable costs per kilo fish produced than larger firms. We use firm-level data for the period 2001-2014 to investigate what has been driving mergers and acquisitions in the Norwegian fish farming industry. Can the presence of economies of scale justify the mergers and acquisitions that have taken place since 2001? Could it be the case that some firms have grown too large? Combining data on mergers and acquisition and inter-firm collaboration (joint production) with annual survey data on firm-level production, costs and revenues, we empirically investigate drivers of mergers and acquisitions in the industry. Our analysis confirms that some firms have become too large relative to what minimizes production costs. In recent years, we find evidence of increasing collaboration between firms, particularly between small and medium sized firms operating in the same regions. Meanwhile, mergers and acquisitions came to a near halt.