Belgian tanker shipping major Euronav believes that Frontline’s unilateral termination of the proposed $4.2 billion combination agreement announced on Monday was unfounded, the company said in an update.
“Euronav has determined that Frontline’s unilateral action in pursuing the termination of the combination agreement has no basis under the terms of the combination agreement between the two companies signed on July 10, 2022 and that Frontline failed to provide a satisfactory reason for its decision to pursue termination,” the update reads.
“Euronav has complied with its obligations under the combination agreement and has done everything in its power to make this transaction a success.”
Indeed, Euronav was powering through with the merger plans despite the efforts of some of its shareholders to prevent the deal. Specifically, Euronav’s shareholder Compagnie Maritime Belge (CMB) sought termination of the company’s tie-up with Frontline last year creating a lot of noise about the deal and its impact on the market.
To remind, Norwegian tanker owner and operator Frontline has terminated the combination agreement it entered into with Belgian counterpart Euronav in July 2022. The abrupt announcement was made on Monday, January 9, and Frontline did not share many details on the reasons behind the decision.
The stock-for-stock merger deal was set to be completed in the first quarter of 2023 following Frontline’s relocation to Cyprus.
“The Supervisory and Management Boards are in the process of analysing the company’s options and will take appropriate action to protect and preserve the rights and interests of Euronav and its stakeholders, including but not limited to potential litigation and/or arbitration,” the tanker owner and operator said.
The company added that it was working on maintaining a constructive dialogue with its shareholders on the matter.
The tie-up of the two giant tanker companies would have created a tanker super-power with a combined fleet of 146 vessels comprising 68 VLCCs, 56 Suezmaxes, 20 LR2/Aframaxes and 2 FSO units.
Furthermore, the proposed combined company was targeting a leading position in the tanker industry and was putting a massive focus on sustainable shipping as both entities had set ambitious decarbonisation targets .