Overseas Shipholding Group acquires Stelmar for $843 million
New York-based Overseas Shipholding Group, Inc. (OSG) has signed an agreement to acquire fellow tanker operator Stelmar Shipping Ltd. for $843 million in cash, heralding the creation of a tanker shipping major with more than 100 vessels.
Under the terms of the merger agreement, holders of Stelmar’s common stock will receive $48 per share in cash, implying an aggregate equity market value of $843 million for Stelmar. Taking into account Stelmar’s outstanding debt, the total value of the transaction is about $1.3 billion.
“The acquisition of Stelmar will establish a leading platform for OSG in product tankers and Panamax tankers and fulfill an important strategic objective for OSG,” said Morten Arntzen, president and chief executive officer of OSG.
“Upon completion of the Stelmar acquisition, OSG will be the second-largest publicly traded oil tanker company measured by number of vessels and the third-largest measured by deadweight tons,” he added.
Stelmar, based in Athens, Greece, has a fleet of 40 vessels, including 24 “Handymax” product tankers, 13 “Panamaxes” and three “Aframaxes.” Ten of OSG’s 61 vessels are U.S.-flagged and operate in domestic U.S. trades, while the other 51 trade internationally.
Both OSG and Stelmar are listed on the New York Stock Exchange.
The merged company would have a fleet of 91 international flag vessels totaling 12.9 million deadweight tons. Of the combined international fleet, 96 percent of the vessels will be double-hulled or double-sided.
The takeover is subject to approval by a majority of Stelmar’s shareholders and satisfaction of customary closing conditions. The transaction is expected to close by the end of January.