Euronav and Frontline sign definitive combination agreement, plan Cyprus relocation

Belgium’s Euronav today entered into a definitive combination agreement with Frontline, bringing John Fredriksen’s dream tanker merger one step closer. New details of the merger show the Euronav brand will disappear and the new entity would be based in Cyprus, an island where Fredriksen has built much of his shipping empire over the past few decades.

The stock-for-stock combination is based on an exchange ratio of 1.45 Frontline shares for every one Euronav share, a deal that has already been approved by both companies’ boards.

The proposed combination is structured as a voluntary conditional exchange offer, due to kick off in Q4 this year, possibly followed by a simplified squeeze out, with the aim to then propose a merger of Euronav into Frontline, which will relocate from Bermuda to Cyprus.

The combined group will be named Frontline, incorporated and headquartered in Cyprus and will be listed in Brussels, Oslo and New York upon tender offer completion. Euronav boss Hugo De Stoop will serve as the CEO of the merged company with Frontline CEO, Lars Barstad, joining the board.

The combined company will be made up of approximately 55% of existing Euronav shareholders and approximately 45% by existing Frontline shareholders.

Frontline and Fredriksen investment vehicles control 18.8% of Euronav shares at present, and have faced a very public battle for control of the Antwerp-based tanker firm from the Saverys family, who have controlled the company for much of the last 25 years.

When he first went public this April with his intention to merge Frontline and Euronav, Fredriksen commented: “A combination of Frontline and Euronav would establish a market leader in the tanker market and position the combined group for continued shareholder value creation in addition to significant synergies.”

Speaking today, Fredriksen said: “Frontline, with a fleet of 146 vessels, will be able to offer value enhancing services for our customers and increase fleet utilisation and revenues which will benefit all stakeholders. I am very excited and give my full support and commitment to this combined platform.”

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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