Flex LNG, Exmar and Fredriksen-led Geveran have cancelled their planned merger, which would have created one of the largest independent floating LNG infrastructure companies in the world.
“The parties have failed to agree on the definitive transaction documents and the previously announced transaction will not be completed,” a statement said today.
The companies had agreed main terms for the merger transaction, which was announced in July, but the deal was pending due diligence and agreement on the small print.
Flex LNG said today it would continue with the construction of its two LNG carriers with its main shareholder Geveran Trading.
The company said it plans to “examine other strategic alternatives to add value to the company and its shareholders, including considerations of opportunities across the LNG value chain. The current condition of the LNG market could give interesting consolidation and growth opportunities for the company”.
Exmar said it will continue to focus on LNG infrastructure and pursue its strategy of barge-based floating LNG (FLNG) and floating storage and regasification (FSRU) projects.
In the original outline for the merger, Flex LNG had planned to acquire LNG vessels and other assets from Exmar and Geveran, after which the combined company would have been known as Exmar LNG Ltd. The merger had an estimated enterprise value of some $2.3bn.
Exmar would have held a 64.6% interest in Exmar LNG, with Geveran holding a 30.7% stake in the company, which would have been listed on the Oslo Stock Exchange.
Six LNG carriers, of which four are newbuildings, were included in the acquisition as part of the deal’s main terms. Five floating storage and regasification units (FSRUs) would also have been acquired, including one still under construction that will become the world’s first regasification barge on delivery.
In addition, two floating liquefaction units (FLNG) would have been acquired by Flex LNG, one of which is Exmar’s Caribbean FLNG (pictured). The unit is still under construction and is scheduled to arrive in the first three months of 2016.
The deal also included long-term timecharters for most of the vessels to be acquired.
