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Norwegian tanker operator Frontline Ltd. and Belgian peer Euronav NV said Monday that they have agreed to merge in an all-stock deal, confirming a plan proposed earlier this year.
The deal is based on an exchange ratio of 1.45 Frontline
FRO,
shares for each Euronav
EURN,
share and is expected to see the combined company held 55% by existing Euronav shareholders and 45% by existing Frontline shareholders, they said.
The combination will create a crude tanker operator with a market capitalization of over $4 billion based on Friday’s trading levels, and a combined fleet of 68 very large crude carriers and 78 smaller tankers, they said.
The combined group will offer value for shareholders and customers and realize significant synergies while increasing fleet utilization and revenues, John Fredriksen, the Norwegian shipping magnate who founded and controls Frontline, said.
The combined group will be called Frontline, incorporated and headquartered in Cyprus and will continue to operate from various offices in Europe and Asia including Belgium, Norway, the U.K., Singapore and Greece.
It will be listed on Euronext Brussels, Oslo Stock Exchange and NYSE and will be headed by current Euronav Chief Executive Hugo De Stoop. Frontline’s current CEO Lars H. Barstad will join the board of the combined group, they said.
The deal is expected to deliver synergies of at least $60 million on an annualized basis.
Write to Dominic Chopping at dominic.chopping@wsj.com
