Global shipping companies Star Bulk Carriers and Eagle Bulk Shipping will combine after signing a definitive agreement for a $2.1bn all-stock merger that will create the largest dry bulk shipping company listed in the US.
The new company, lead by Star Bulk’s existing management team along with some senior Eagle Bulk executives, will operate a 169-strong fleet ranging from Newcastlemax/Capesize to Supramax/Ultramax vessels.
Petro Pappas, CEO of StarBulk who will remain with the title at the new business, said that the merger would create a new global leader in dry bulk shipping, he said: “We will leverage both companies’ technical and commercial fleet management capabilities to optimize performance, deliver on our health, safety, and environmental objectives and maximize earnings potential.
“With a well-capitalized balance sheet, we aim to continue delivering strong cash returns to shareholders while investing in emission reduction technologies as we continue to pursue growth over the long term.”
Once the deal is finalised, expected in the first half of 2024, Star Bulk shareholders will own around 71% of the company, while Eagle Bulk shareholders will own the other 29%, both on a fully diluted basis.
The two companies are expecting the transaction to generate at least $50m in annual cost and revenue synergies within a year to a year-and-a-half of the merger closing through the integration of operations and economies of scale.
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Gary Vogel, CEO of Eagle Bulk, said: “We are very excited to be joining forces with Star Bulk, uniting two best-in-class companies, both commercially and operationally.
“We are bringing together two highly complementary organizations and are confident that this accretive merger with Star Bulk will unlock significant value for Eagle shareholders.”
In addition to the existing fleets of the two companies, Star Bulk is expecting the delivery of six vessels on long-term charter agreements during 2024 while Eagle Bulk, one of the world’s largest owner-operators of midsize dry bulk vessels, took delivery of an Ultramax vessel earlier this year.