Paddy Rogers said “Today marks an important milestone in the continued development of Euronav. Completing this transaction provides the crude tanker market with a global player of substantial size.”

According to Euronav, the merger creates the leading independent large crude tanker operator in the world, with 76 operating crude tankers, consisting of 43 VLCCs, 27 Suezmaxes, two ULCC, two Panamax tankers and two FSOs under joint venture, representing over 19.4M dwt in aggregate.

The deal gives Euronav an estimated pro-forma market capitalisation of approximately US$2Bn, based on Euronav’s closing price of US$9.10 per share on 11 June 2018.

Euronav announced a liquidity position estimated at more than US$800M, including cash on hand and undrawn amounts available under existing credit facilities.

The deal also has an impact on the Tankers International Pool (a spot market-oriented tanker pool) which increases in size to 65 VLCCs. According to Euronav, this increase in scale will allow the pool to continue to provide the lowest commercial fees as a percentage of revenue in the sector.

The Euronav Gener8 merger is part of a trend in the tanker industry as companies strive to increase in size to maximise economies of scale. Around 18 months ago, Frontline tabled a US$475M takeover bid for rival DHT Holdings on the back of the purchase of a 16.4% stake in the company.

In response, DHT bolstered its own fleet by acquiring BW Group’s entire VLCC fleet. This was legally challenged by Frontline, with DHT claiming victory.