Ferry News Archive
DFDS snaps up Norfolkline for $496m
Date: 17 Dec 2009 15:00 Source: Lloyds ListAP Moller-Maersk is selling its European ro-pax ferry subsidiary Norfolkline to DFDS in a €347m ($496.3m) share and cash deal that sees Maersk take a 31% strategic stake in the ferry operator, which provides services in the Baltic and North Sea.
Talks between the two Copenhagen-based groups have been under way for more than six months, and the new venture will create a pro forma €1.5bn turnover ferry business stretching from Russia to Ireland, with 6,200 employees and a fleet of 73 vessels, half of which are owned.
The deal excludes two Norfolkline vessels, Maersk Vlaardingen and Maersk Voyager , which have been sold.
Danish deepsea container and box terminal giant Maersk will receive €170m in cash and a 28.8% post-completion stake in DFDS worth €176m, rising to 31% with the purchase of additional equity from Lauritzen Fonden, DFDS’s biggest shareholder, which retains a 36% stake.
Both parties have agreed to a share lock-out for 24 months following completion of the deal in the second quarter of 2010, with DFDS saying that it does not foresee “any major obstacles” from the competition authorities.
DFDS chief executive Niels Smedegaard called the deal “a perfect match,” and said that management had already identified an initial DKr135m ($26m) of savings to be achieved within two years.
He added that other areas of potential cost savings included Norfolkline vessel charters, redeployment of group-owned tonnage on existing routes and overlapping terminal operations, primarily in the Rotterdam area and in the east coast of England, at Killingholme and Immingham.
Mr Smedegaard said: “Norfolkline is a leading ferry and logistics company with a strong route network that covers the North Sea, the Channel and the Irish Sea, and which is combined with a considerable logistics operation.
“This means DFDS’ network is expanded to include two new markets, the English Channel and the Irish Sea, we can combine our operations on the North Sea and our ability to secure volumes for the network is greatly strengthened.”
Søren Skou, partner and member of the Maersk Group’s executive board, said: “We have identified both operational and commercial synergies, which will create value for the owners, and we look forward to becoming a major shareholder in DFDS.”
DFDS chief financial officer Torben Carlsen said that Norfolkline’s “relatively young” fleet meant there was no need for immediate investment in ships, adding that both DFDS and its takeover target do not have any tonnage on order.
Mr Smedegaard said the Norfolkline logistics business, twice the size of DFDS’ supply chain operations, was another key factor in the deal, which would provide “a critical mass” of volumes for the combined ferry operations.
Is is not clear at this stage whether the Norfolkline brand will be retained or the scale of any job losses.
Mr Smedegaard said management would have to wait until the deal received regulatory approval before the full details of what he described as “a transformational acquisition” could be worked out.
He said the takeover would “substantially improve the DFDS balance sheet”, with the added bonus that it did would ease the company’s debt situation and give a “more balanced ownership structure” and greater liquidity in DFDS shares.
A total of four banks are providing a finance facility, including Danske Bank and Nordea, both of which are underwriting €45m of a €75m right issues to finance part of the deal.
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