Merger activity increased last week with six new deals announced, one deal completed and one merger that fell apart. One of the deals announced last week was a potential deal in the works.
We added Euronav (EURN) as a potential deal in the works on April 7, 2022, when Frontline (FRO) and Euronav announced that the companies had signed a term sheet on a potential stock-for-stock combination, that would result in Euronav and Frontline shareholders owning approximately 59% and 41% of the combined company respectively.
Euronav started operating as a subsidiary of CNN (Compagnie Nationale de Navigation) under the name ‘Euronav’ in 1989. In 1995, a joint venture called Euronav Luxembourg SA was formed between Compagnie Nationale de Navigation (CNN) and Compagnie Maritime Belge (CMB) to consolidate all the tanker activities of CNN. CMB is controlled by the Belgian family Saverys. The proposed merger between Euronav and Frontline was opposed by Alexander Saverys, scion of the Belgium shipping family that holds a near-20% stake in Euronav. He proposed that Euronav instead merge with the clean shipping division of his company.
On May 19, 2022, Euronav said that its shareholders voted to reject a proposal from Compagnie Maritime Belge to nominate three supervisory board members. As merger plans moved forward, Frontline bought nearly 6 million shares in Euronav in a privately negotiated share exchange transactions with some Euronav shareholders.
On Monday, July 11, 2022, Euronav and Frontline signed a definitive combination agreement, under which shares in Frontline, would be exchanged for those in Euronav at a ratio of 1.45 to 1, to create an oil tanker group with 146 vessels including 68 Very Large Crude Carriers (VLCCs). 55% of the combined company will be held by existing Euronav shareholders and approximately 45% by existing Frontline shareholders.