The year 2017 will go down as one of peak consolidation and it is ending with one of the most notable mergers yet. Euronav is taking over Gener8 in a $504m share for share deal to create a true giant in the tanker sector.
The merger will create the leading independent large crude tanker operator in the world with a fleet of 75 crude tankers, including 44 VLCCs and 28 suezmaxes, representing more than 18m dwt. The combined entity will have balance sheet assets of more than $4bn.
The merger is subject to the approval of Gener8’s shareholders and some of its lenders.
Carl Steen, Paddy Rodgers and Hugo De Stoop will remain respectively chairman of the board, CEO and CFO of the combined entity.
Euronav said in a release today that a “reputable third-party tanker owner” has agreed to purchase from the combined entity six modern VLCCs upon closing of this transaction for $434m to ensure Euronav continues to have solid leverage and liquidity.
Commenting on the merger, Carl Steen, chairman of Euronav said: “The merger between Euronav and Gener8 is expected to deliver real value for both sets of shareholders. The financial strength of the combined entity together with a strong leadership team will make it well placed to navigate the tanker cycle.”
Peter Georgiopoulos, chairman and CEO of Gener8, said: “I have been a vocal advocate for consolidation in the shipping industry and have always stated that we would be a willing buyer or seller depending upon what is best for our shareholders. This transaction creates the largest independent VLCC fleet in the world.”
Paddy Rodgers, the CEO of Euronav, told Splash earlier this year that he was keen to be involved in the consolidation phase of the tanker sector.
“There is value in buying stuff cheap,” Rodgers told Splash in April. “We are not going to a shipyard for a year or two. The world fleet is not old enough to warrant ordering.”
Euronav did look at the BW VLCC fleet, prior to DHT Holdings taking that over. DHT had been the target of John Fredriksen’s Frontline in the first few months of this year as consolidation within the sector picked up pace. Fredriksen was also linked to buying out Gener8 Maritime earlier this year.