Wall Street is losing another shipping stock with US tanker owners International Seaways and Diamond S Shipping agreeing to merge in an all-share deal creating a $2bn tanker owning giant.
The merger will see International Seaways shareholders own around 55.75% of the combined company, while Diamond S shareholders will own 44.25%. The company will become the second largest US-listed tanker company by vessel count, with 100 vessels and an enterprise value of around $2bn.
International Seaways executives Douglas Wheat, Lois Zabrocky and Jeffrey Pribor will continue to serve as the chairman, CEO and CFO respectively, while Diamond S CEO Craig Stevenson will join the board and act as a special advisor to the CEO for six months.
Lois Zabrocky, CEO of International Seaways, commented: “By bringing together two leading US-based diversified tanker owners, we expect to deliver a number of compelling strategic and financial benefits to the stakeholders and customers of both companies. Specifically, with our enhanced scale and capabilities combined with a best-in-class ESG track record, we are ideally positioned to meet the evolving needs of leading energy companies and capitalize on favorable long-term industry fundamentals. With this highly accretive merger, we also expect to realize significant cost synergies while maintaining one of the lowest net leverage ratios in global shipping and increasing our equity market capitalization and liquidity for the benefit of our shareholders. We are proud of INSW’s accomplishments since becoming a public company over four years ago and intend to continue to maintain an intense focus on preserving our financial strength and executing a balanced and accretive capital allocations strategy. In addition to the special dividend related to this compelling transaction, we remain committed to returning capital to shareholders through our share repurchase program and our quarterly dividend.”
The merger transaction is expected to close in the third quarter of 2021, and is subject to the approval of the shareholders of both companies as well as relevant regulatory approvals.