Shipping services company Clarkson revealed on Friday that it is holding merger talks with Oslo-based broker and investment bank RS Platou.
The move would reaffirm the London-based company’s position as the world’s leading shipbroker by giving it sales worth twice that of competitors. Other consolidations in the industry may follow as falling prices for new and second vessels, as well as low charter rates, squeeze the sector. Brokers usually earn one to two percent of the value of the deals they are involved in, and shipping is currently experiencing one of its longest ever low periods.
Clarkson was established in London in 1852 and now has 42 offices and over 1,000 employees around the world. Platou was established in 1936 and has operations in 18 countries with around 370 employees.
"Brokerage fees have fallen at least 50 percent since the collapse of Lehman and the same holds for [vessel] values, so times are tough for the brokering business," MarketWatch reports an analyst as saying. "Owners looking for new ships are also increasingly going directly to yards without using broker, and this also hurts their revenue, so teaming up will be beneficial for both Clarkson and Platou as operational costs can be cut by at least 15 percent."
Clarkson reported an operating profit of GBP22 million ($35.2 million) in 2013, says MarketWatch, and Platou operating profit was 174 million Norwegian kroner ($25.6 million).
In 2012, Platou tried unsuccessfully to merge with London-based broker ACM Shipping Group.