Saltchuk Completes Acquisition of OSG After Several Previous Offers

OSG tanker
OSG's tanker business becomes the seventh unit of Saltchuk's diversified maritime portfolio (OSG)

Published Jul 10, 2024 5:48 PM by The Maritime Executive


Saltchuk Resources completed its previously announced tender offer to acquire all the outstanding shares of common stock of Overseas Shipholding Group (OSG) as the last step in the acquisition of the company focused on Jones Act tankers. 

OSG joins Saltchuk as its seventh business unit, adding energy shipping to its diversified lines of business which include domestic shipping, international shipping, logistics, marine services, energy distribution, and air cargo. Among its maritime interests are ownership of TOTE, Tropical Shipping, Foss Maritime, and towing company Young Brothers.

The companies reached terms for the acquisition in May nearly five months after Saltchuk made an unsolicited indication of interest in January 2024. The private company controlled by the Engle family and the largest family-owned business in Washington State had made a series of approaches seeking to add the tanker business to its portfolio. 

The deal established an enterprise value of approximately $950 million for OSG as Saltchuk offered to buy all the outstanding shares it did not already own for a price of $8.50 per share in cash. The agreed price was a 61 percent premium to the stock price in January 2024 and was an increase of the indication of $6.25 per share when they announced the latest offer this year. Saltchuk previously sought to buy OSG in 2021 with an offer of $3.00 per share or a deal then valued at $260 million.

More than 47.7 million shares were tendered, representing approximately 66 percent of the issued and outstanding shares of OSG common stock, not including Saltchuk’s holdings. The deal closed this morning and OSG’s stock ceased trading on the New York Stock Exchange. 

“With OSG, Saltchuk now numbers more than 8,500 people,” said Saltchuk Chairman Mark Tabbutt.  “As with our other businesses, OSG will remain standalone and independently managed. We look forward to working alongside the OSG team as we move forward together.”

Sam Norton, OSG’s President and Chief Executive Officer highlighted the opportunities saying Saltchuk is committed to sustaining the important role of the domestic maritime industry within the United States.

Dating to the 1940s, OSG has been involved with shipping oil from Alaska and other shuttle tankers and barges since the 1960s. The company spun off its international tankers after it went bankrupt in 2012. It emerged from bankruptcy in 2017 and today provides liquid bulk transportation services for crude oil and petroleum products in the U.S. Flag markets. OSG’s 21-vessel U.S. flag fleet consists of Suezmax crude oil tankers, conventional and lightering ATBs, shuttle and conventional MR tankers, and non-Jones Act MR tankers that participate in the U.S. Tanker Security Program.

OSG announced last year that it was investing in its Alaskan crude oil transport business by purchasing and reactivating a tanker as well as upgrading the engines on its three existing Alaska tankers. They said they expected Alaskan oil output to continue to increase. Recently, the company was also awarded a $3 million federal grant for the engineering and design of a new vessel that will transport liquified carbon dioxide (LCO2).