Chemical tankers operator Stolt-Nielsen has become one of the top shareholders in the Norwegian competitor, Odfjell, sparking merger speculation.
The Oslo-listed Stolt-Nielsen has accumulated 3,285,441 of the class A shares in Odfjell, equalling 5% ownership interest and making it the Bergen-based company’s third-largest shareholder.
The move is seen as a financial investment, Jens F. Grüner‑Hegge chief financial officer at Stolt‑Nielsen told Splash. “The Odfjell share is trading at a substantial discount to net asset value, particularly when you strip away the terminal business, so this represents a good entry point into their share. Also, by buying Odfjell shares rather than our own we are not contributing to limiting free-float in the Stolt-Nielsen share.”
In terms of a potential merger, Grüner‑Hegge said that there are currently no discussions with Odfjell. However, he noted that “should this investment lead to such an opportunity then we would certainly consider it.”
Chair Laurence W. Odfjell stated it was interesting that a major competitor considered Odfjell as a good investment, but when it came to consolidation in the chemical sector, although it might appear to be beneficial, he pointed out that there are only a few global players in the deep-sea specialty segment. “I therefore believe that consolidation of Stolt and Odfjell is not realistic – customers expect that there are real alternatives for their logistics needs,” he told Norwegian business daily Finansavisen.
Odfjell group has a fleet of approximately 90 ships, as well as a tank terminal division consisting of five tank terminals, which is part of a network of another 11 tank terminals partly owned by related parties. The company bounced back into the black in the fourth quarter of 2021 but recognised a full-year net loss of some $33m mainly due to weak chemical tanker markets in the West.