Global Shipping Giants Star Bulk And Eagle Bulk To Form The Largest Dry Bulk Shipping Company

The US-based Eagle Bulk Shipping and the Greek-based Star Bulk Carriers have merged to form the largest dry bulk shipping company listed in the US. Both companies’ boards of directors have approved the all-stock merger, resulting in a pro forma market capitalisation of $2.1 billion.

One hundred sixty-nine owned vessels will make up the combined fleet when the deal closes in the first half of 2024.

For every share of Eagle common stock, stockholders of Star Bulk will be entitled to 2.6211 shares of common stock, for a total estimated value of $52.60 per share, representing a 17 per cent premium over Eagle’s closing value of $44.85 per share on the 8th of December. After the merger, Star Bulk and Eagle owners will own roughly 71 per cent and 29 per cent of the merged business on an equal basis.

The merged company will be called Star Bulk Carriers, and its CEO will be Petros Pappas, who is currently Star Bulk’s CEO, with offices in Singapore, Stamford, Copenhagen, Connecticut, and Limassol; the headquarters will be located in Athens.

The current chairman of Star Bulk, Spyros Capralos, is going to serve as the company’s combined board chairman.

After the closure, the newly created company is expected to combine about $420 million in liquidity, emphasising creating annual cost and revenue synergies of $50 million within the first twelve to eighteen months.

The companies aim to achieve synergies through scale, such as lower general and administrative costs and the integration of commercial operations.

Both firms stress their dedication to environmental goals and their intention to invest in emission-reducing technologies. By combining the strengths of both companies, the merger seeks to establish a dominant player in the dry bulk shipping industry while providing substantial financial returns to shareholders.

The transaction will be completed in the first half of 2024, pending regulatory clearance, approval by Eagle shareholders, and satisfaction of customary closing conditions.

Reference: Splash

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