Tanker Investments has entered into a definitive agreement to merge with Teekay Tankers to create the world’s largest publicly-traded mid-sized conventional tanker company with combined total assets of $2.4 billion.
“We are pleased to announce today that Tanker Investments has entered into a binding agreement to merge with Teekay Tankers, the leader in mid-size, crude oil tanker shipping and the current operational, technical and commercial manager of Tanker Investments’ vessels,” commented William Hung, Tanker Investments’ Chief Executive Officer. “We expect the merger to be seamless, cost-efficient and create the world’s largest publicly-listed owner and operator of mid-size crude tanker assets, operating 62 ships once the merger is completed.”
Hung added, “With a larger combined balance sheet and operating fleet with fully-integrated operations, we believe Teekay Tankers will be the leading tanker company in the mid-size sector positioned to take advantage of future opportunities.”
A Special Committee, comprised solely of Tanker Investments’ three independent directors, was formed to evaluate all proposals received and the Special Committee unanimously approved the merger.
Teekay Tankers currently owns a fleet of 40 double-hull tankers, including 20 Suezmax tankers, 13 Aframax tankers, and seven Long Range 2 (LR2) product tankers, and has three contracted time charter-in vessels. The company also owns a VLCC through a 50 percent-owned joint venture.
It also currently owns an 11.3 percent interest in Tanker Investments, and following the consummation of the merger, Tanker Investments will become a wholly-owned subsidiary of Teekay Tankers. Upon completion of the merger, Tanker Investments’ shareholders (other than Teekay Tankers and Teekay Corporation) will own approximately 30 percent of the combined entity, consisting of 62 conventional tankers, including three in-chartered vessels (30 Suezmax tankers, 22 Aframax tankers, nine LR2 Product tankers and one 50 percent-owned VLCC tanker).
Kevin Mackay, Teekay Tankers’ President and Chief Executive Officer, said: “Once finalized, the acquisition will lower our average fleet age, reduce our financial leverage and increase our total liquidity position. In addition, with the acquisition of the remaining interest in Teekay Operations, Teekay Tankers has now completed its evolution into a fully-integrated conventional tanker platform with all management and operations now owned and operated solely by Teekay Tankers.”
The merger is expected to close in the third quarter of 2017.
Sullivan & Cromwell is serving as legal counsel, and Evercore is serving as financial advisor to the Special Committee of Tanker Investments.