$4.2 Billion Oil Tanker Merger Falls Through

A planned merger by two of the largest tanker operators in the world—Euronav and Frontline—has fallen through and the two companies will not make another attempt to combine their business.
“We regret that we could not complete the merger as envisaged in July 2022, as that would have created the by far largest publicly listed tanker company. At the same time, both companies have independently very large fleets of crude oil and product tankers, and are already enjoying economies of scale as evidenced by our respective recent financial reports,” said the chief executive of Frontline, Lars H. Barstad, in a statement.
In response, Euronav issued a press release confirming the receipt of Frontline’s decision to terminate the merger process and stating that “Regardless of the combination taking place, the supportive and sustainable fundamental factors of the tanker markets have started to deliver (during Q3 and Q4 2022) what Euronav and most sector commentators believe will be a prolonged upcycle.”
“Such favourable conditions coupled to Euronav’s strong balance sheet, best-in-class operating system with the most developed sustainability platform in the sector positions our company well for the future,” the Belgian company also said.
Neither company gave reasons for the termination of the deal, worth some $4.2 billion, which would have resulted in the biggest tanker operator in the world. Reuters noted in a report, however, that Belgian Euronav had run into trouble with its biggest shareholder, Compagnie Maritime Belge, which was opposed to the tie-up with Frontline.
If the merger had gone through, it would have created a company with a fleet of 146 tankers.
The Wall Street Journal recalled the shareholder, controlled by the Saverys family, describing the deal as a “value-destructive madness” at the time it was first announced, last year. The Saverys family controls a quarter of Euronav’s shares.
The report also notes that the owner of Frontline, Norwegian billionaire John Fredriksen, is strongly in favor of consolidation in the tanker sector as he believes it is currently too fragmented to create sufficient shareholder value. $SPDR S&P 500 ETF(SPY.US)$ $S&P 500 Index(.SPX.US)$ $Camber Energy(CEI.US)$ $Imperial Petroleum(IMPP.US)$ $Occidental Petroleum(OXY.US)$