Speak to almost anyone with a financial interest in the tanker industry and they will allude to the perils of over-supply and the desirability of consolidation. The topic has been in the news recently following DHT’s acquisition of BW Groups’ VLCC fleet. http://www.tankershipping.com/news/view,dht-swoops-on-bws-vlcc-fleet_47078.htm
As DVB Bank senior vice president Paal Hauge put it rather neatly last month: “Everybody wants to be a consolidator. Unfortunately, that cannot happen.” http://www.tankershipping.com/news/view,why-tanker-shipping-struggles-for-funding_47262.htm
Stolt Tankers has been in the vanguard of recent consolidation and its approach when it bought Jo Tankers may provide the clue as to how consolidation in the tanker market may play out in the future. http://www.tankershipping.com/news/view,stoltnielsen-acquires-jo-tankers_45811.htm
Stolt had to pay full value for the Jo Tanker’s platform. Stolt was trading its own share at about 60 or 70 per cent of its net value, so at first glance it was not a particularly good proposition for Stolt to buy Jo Tankers at full value. But as Mr Hauge suggests: “Stolt had different drivers to do that transaction. The point is, when you are merging similar entities, it is much easier to get better pricing out of it.” Stolt is reportedly looking to apply this approach to further acquisitions. Watch this space.