MSC Mediterranean Shipping Company has launched a tender offer to acquire Norway’s Gram Car Carriers, marking a significant expansion into the vehicle transport sector. This deal, valued at $728 million or $25.12 per share, represents a 17.5 percent premium over Gram’s highest share price since it went public in 2022. The acquisition underscores MSC’s strategic move to leverage its global logistics expertise and diversify its operations.
Gram Car Carriers, recognized as the third largest tonnage provider in the vehicle sector, operates a fleet of 18 modern car carriers. These vessels, ranging from highly advanced distribution ships to mid-size and Panamax vessels with capacities between 2,000 and 7,000 units, have established Gram as a key player in the industry. Notably, the company is expanding its fleet with four LNG dual-fuel vessels currently under construction, aligning with environmental sustainability goals.
MSC currently operates two car carriers with a combined capacity of 6,700 units and also transports vehicles in containers on its containerships. This acquisition is timely, coinciding with increased demand and capacity shortages in the car carrier sector. Major players like Hoegh, Wallenius Wilhelmsen, and Hyundai Glovis are also expanding their fleets, indicating robust growth in this market. Additionally, CMA CGM’s recent entry into the sector with four newbuild car carriers highlights the competitive landscape MSC is navigating.
The acquisition will provide MSC with an enhanced presence in vehicle transport, complementing its existing logistics services. MSC’s Executive Vice President and Chief Product Officer for Logistics & Services, Narin Phol, emphasizes the strategic fit of Gram’s assets within MSC’s broader logistics network. The deal is also expected to bolster MSC’s service offerings, providing customers with more integrated and efficient solutions.
Gram Car Carriers’ board has unanimously recommended MSC’s offer, which offers up to a 77 percent premium over the 365-day weighted average. The tender, which launched on May 27, is set to run until June 26, with a potential extension to August 5. MSC aims for 90 percent acceptance of the offer and reports that over 54 percent of shares are already committed by major shareholders. The acquisition is expected to close in the third or fourth quarter of this year, contingent on final approvals and mandatory conversions for any remaining shares.
This move marks MSC’s first significant expansion beyond its core container shipping operations, apart from its investments in the cruise sector. MSC has also been active in acquiring logistics companies, investing in rail and air freight operations, and running port operations. The company is currently awaiting final approval to complete its acquisition of terminal operations at the Port of Hamburg, Germany, further diversifying its logistics portfolio.
Source:The maritime executive
