The long-anticipated deal was welcomed by analysts as a transaction which takes Frontline directly to the top of the tanker class, with the promise of meaty dividends and further growth.

“Fredriksen is now building a giant with a share price-currency matched by no other in the tanker-world, ready to grow in the red hot market where second hand values are lagging earnings,” said Eirik Haavaldsen of Pareto Securities.

Fredriksen will have a 52% stake and his Ship Finance International will hold a further 7% of the company, which the analyst notes has a market capitalisation of $1.95bn at its present share price.

“While we would expect the FRO share price to fall today, we emphasize that the combined company will have strong earnings power and build its NAV quickly,” Haavaldsen said.

Shares in Frontline followed the expected script and were trading down over 6% on Thursday afternoon.

The merger marks a firm end to a financially troubled few years for Frontline, which lead to the creation of Frontline 2012 in the first place and a long-running convertible bond drama which was resolved in April.

Erik Nikolai Stavseth of Arctic Securities says today’s deal sees Frontline “rising like a phoenix with help from Frontline 2012” 

The super-sized Frontline will have 90 vessels to its name. Its major presence will be in the VLCC market, with 25 ships (Euronav has 33).

Frontline will also have 17 suezmaxes, 16 MRs and 10 LR2s, around 20 vessels on time charter or under commercial management, plus 22 newbuildings.

“A new tanker giant is born,” Stavseth said, adding the mix of a “company poised to pay dividends, targeting growth, low fees and low presence of private equity investors ready to sell, the new Frontline could quickly become the preferred tanker stock”.

The stock transaction will see Frontline 2012 investors receive 2.55 Frontline shares for each one they hold.

Nicolay Dyvik, Oyvind Berle and Petter Haugen of DNB Markets said: "We believe the exchange ratio is made at fair terms between the two companies given Frontline’s less tangible NAV based largely on discounted cash flows.

"We believe that the new company could well become the ultimate yield play with premium pricing to peers."