Two major transactions this week accelerated the consolidation of the chemical tanker market.
Private equity-owned Nordic Tankers was sold to MOL Chemical Tankers of Singapore on Tuesday.
Just hours later, it emerged that two of the world’s major private shipowners, Idan Ofer and Andreas Sohmen-Pao, had closed a $350m fleet deal in the same segment.
Triton, which had owned Nordic Tankers since 2012, had reached the natural end of its investment horizon, market sources said.
It was one of a number of private equity investors attracted to the chemical tanker niche in the middle of this decade, fuelling the suggestion other deals are likely to emerge.
“Private equity firms are not shipowners,” one source said. “They buy and sell companies.”
The combined MOL Chemical and Nordic Tankers will boast a fleet of 75 vessels. While a statement noted synergies between the new partners, it stressed no staff would be leaving as a result of the takeover.
Strengthening positions
Per Sylvester Jensen, chief executive of Nordic Tankers, told TradeWinds the company’s position in the trans-Atlantic and South American markets would add to MOL Chemical Tankers’ stronger standing in other regions. He also noted a shared philosophy around long-term contracts and customer relations.
Jensen declined to comment on potential further growth efforts before the deal was closed and the matter had been discussed with MOL Chemical Tankers, a private company owned by Japanese giant MOL.
However, he does believe the merger is unlikely to be the end of the consolidation story in the chemical market. “There are a number of players who do not have a global reach to achieve the economies of scale,” Jensen said.
“I would not be surprised if we saw more of these [mergers] in the future as well. There are a number of financial investors in the market and many of those will have a time horizon on those investments.”
Tankers change hands
Within 24 hours of the Nordic Tankers deal being announced, it emerged that Idan Ofer’s Eastern Pacific Shipping had closed a transaction to buy 13 chemical tankers from BW Group.
TradeWinds first broke news of the deal between two heavyweights of the industry in November last year, with the ships then on subjects. Now market sources say pen has met paper on a firm agreement.
Unlike the Nordic Tankers deal, the transaction between Ofer and Sohmen-Pao fits their respective positions in the wider tanker market rather than a need to cash out.
BW is putting the finishing touches to the takeover of product tanker owner Hafnia Tankers. It will then push for a listing on a major stock exchange, a long-standing goal for BW and its product fleet.
Ofer’s Eastern Pacific is expected to place the vessels in the Ace Quantum Chemical Tankers pool.
It already operates 22 ships in the 19,000-dwt range, largely in the Atlantic. The addition of the 13 vessels from BW will help expand its geographical coverage, sources note.
Eastern Pacific’s last tanker fleet purchase came in the summer of 2014, with a six-ship swoop.
It was reported at the time to have paid around $210m for the Blenheim Shippingaframax tankers with the ships delivering into a cyclical upswing in the freight market.
The chemical market was plagued by overcapacity in 2013 and 2014 before enjoying “decent” rates in the following two years. It has since weakened again. However, supported by growth in the global economy and a falling orderbook, many are again anticipating an improvement.
