A.P. Moller – Maersk invests in product tanker business
Denmark’s A.P. Moller – Maersk Group intends to create the world’s largest product tanker company with an all cash offer of 57 Swedish Kronor ($10.19) per share for Brostr'm AB of Sweden.
The offer, which values the share capital of Brostr'm at SEK 3.62 billion ($567.4 million), was formally made through Maersk Product Tankers and will be financed by cash funds from the parent group. Combined, the two companies will have an owned, long-term chartered and managed fleet of 241 vessels with pro-forma annual sales of $1.23 billion.
Maersk intends to keep the Brostr'm name, with the fleet of small and intermediate tankers below 25,000 deadweight tons to be managed from Brostr'm’s home base in Gothenburg. All product tankers above 25,000 dwt (handy and mid-range) are to be integrated into Maersk Tankers’ commercial and operational vehicle in this segment, the Handytankers Pool.
Maersk said the planned commercial and operational structure of the two companies might eventually result in some organizational changes “in part to benefit from Brostr'm’s highly regarded setup in Gothenburg.” There are no plans to change any of the current Brostr'm and Maersk Tankers partnerships, pools or commercial management agreements.
The holders of all shares of class A in Brostr'm, together holding shares of class A and B representing 29.3 percent of the capital and 55.9 percent of the votes, have irrevocably undertaken to accept the offer while Brostr'm’s board of directors has recommend shareholders to accept the offer.
Maersk said it has identified Maersk Tankers as one of the growth areas within the group and has been tracking Brostr'm’s progress closely for several years “as part of the ongoing interest in participating in industry consolidation.”
“Our customers in the oil industry need more flexible transportation solutions because of the world’s increased demand for energy. We can offer a superior worldwide service by having a larger fleet and by combining the strength and scale of Brostr'm and Maersk Tankers,” said S'ren Skou, chief executive officer of Maersk Tankers and member of the A.P. Moller – Maersk Group executive board.
“The combined operation will deliver valuable economies of scale over time, and we will be able to offer customers worldwide access to a modern and homogeneous product tanker fleet which complies to the strictest quality and safety standards in the industry.”
Lennart Simonsson, CEO of Brostr'm, said: “Consolidation is needed and will continue in our industry. Brostr'm has been active in this process for many years and acquisitions have been a vital and successful part of our strategy. In our evaluation of various partners, for further consolidation of our industry, it is our view that Maersk Tankers is one of the best partners to team up with. There is from a business point of view a perfect match between our two companies.”