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BW LPG makes $1.1bn offer for Dorian LPGBW LPG makes $1.1bn offer for Dorian LPG

BW LPG is seeking a major consolidation of the sector through a $1.1bn all-stock merger with Dorian LPG.

Marcus Hand, Editor

May 30, 2018

2 Min Read
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The merger of BW LPG and Dorian LPG would create an industry leading player with a fleet of 73 vessels, with a capacity of 6m cu m, focused heavily on the Very Large Gas Carrier (VLGC) segment with 68 VLGCs on the water and further two newbuildings.

BW LPG’s parent, Andreas Sohmen-Pao helmed BW Group, already owns a 14.2% stake in Dorian, and is proposing a merger through an all-stock transaction where Dorian LPG shareholders would receive would receive 2.05 shares in BW LPG for each share in Dorian LPG. The proposal represents a value of $7.86 per share of Dorian LPG stock equating to a total enterprise value for the deal of $1.1bn.

“Combining Dorian’s high quality fleet and operating platform with BW LPG’s vessels and expertise would create a larger combined fleet with better geographical coverage to drive value for our customers,” said Martin Ackermann, ceo of BW LPG.

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BWLPG said the merger would enhance trading liquidity and provide a stronger credit profile allowing for greater financial flexibility going forward. Financial and operational synergies are “conservatively estimated” at a $15m annual run-rate savings.

As part of the transaction Oslo-listed BW LPG plans a dual listing on the New York Stock exchange (NYSE).

It is the latest consolidation by BW Group, which has undertaken a number of transactions in different sectors of the industry.

Read more: BW plays the consolidation game

In a letter to John Hadjipateras chairman, president and ceo of Dorian LPG, Sohmen-Pao, chairman of BW LPG and BW Group, said: “We think highly of Dorian’s fleet, management and operating principles. We share your vision to build a high quality LPG shipping fleet and agree with Dorian’s publicly-stated views regarding the strategic and financial benefits of industry consolidation.

“We believe a combination would provide our respective shareholders with the opportunity to own a larger, stronger company in the midst of challenging industry conditions.”

The proposal would require simple majority shareholder approval from BW LPG shareholders, with BW, which owns a 45% stake, having already supported the transaction.

BW LPG said it was “prepared to engage expeditiously” to complete the transaction.

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About the Author

Marcus Hand

Editor

Marcus Hand is the editor of Seatrade Maritime News and a dedicated maritime journalist with over two decades of experience covering the shipping industry in Asia.

Marcus is also an experienced industry commentator and has chaired many conferences and round tables. Before joining Seatrade at the beginning of 2010, Marcus worked for the shipping industry journal Lloyd's List for a decade and before that the Singapore Business Times covering shipping and aviation.

In November 2022, Marcus was announced as a member of the Board of Advisors to the Singapore Journal of Maritime Talent and Technology (SJMTT) to help bring together thought leadership around the key areas of talent and technology.

Marcus is the founder of the Seatrade Maritime Podcast that delivers commentary, opinions and conversations on shipping's most important topics.

Conferences & Webinars

Marcus Hand regularly moderates at international maritime events. Below you’ll find a list of selected past conferences and webinars.

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