In September, a new partnership structure was announced for Wallenius Wilhelmsen Logistic (WWL), EUKOR Car Carriers and American Roll-on Roll-off Carrier (ARC). We own all three companies together with Swedish-based Wallenius*.
The new structure builds on a partnership with Wallenius dating back to 1999. Our goal with the merger is to create an efficient and agile platform to ensure a world leading position within seaborne transportation of cars and rolling cargo.
By merging our ownerships, one company will own 100% of WWL, 80% of EUKOR* and 100% of ARC. In addition, to the ownership, we are merging our vessels and affected assets and liabilities. One common management is much more efficient than the existing structure with several owners and boards.
The company will be named Wallenius Wilhelmsen Logistics ASA. The abbreviation ASA means that the new entity will be listed on the Oslo Stock Exchange. Wilhelmsen and Wallenius plan to own approximately 40% of the new entity each. The remaining shares will be owned by external shareholders.
Craig Jasienski is now CEO and President of both EUKOR and WWL. Craig will head up the new company once the formal agreement is in place and all the necessary financial and legal processes have been conducted.
Mr Jan Eyvin Wang, president and CEO of Wilh. Wilhelmsen ASA, heads up the legal and financial transaction from Wilhelmsen’s side.
There is a great potential to grow the logistics footprint further. Chris Connor, who used to head up WWL, now leads a project aiming at accelerating growth within the land-based segment.
Bigger is better – synergies
– One common administration instead of one in Wilhelmsen and one in Wallenius. This enables a more efficient management of WWL and EUKOR.
– Tonnage optimisation and planning.
– Administrative, commercial and operational synergies between WWL and EUKOR.
FIRST QUARTER 2017
Wallenius Wilhelmsen Logistics ASA is expected to commence business during the first quarter of 2017. Establishing the new structure requires a few important steps. Early September, we signed a letter of intent describing what we want to achieve.
The next steps include agreeing on the terms for the company, fulfilling legal and financial requirements, acquiring approval from competition authorities and setting up the necessary structures to launch the company to all stakeholders. We expect to complete the transaction within the first quarter of 2017.
The new entity will be based in Norway. Exactly where the head office will be located is up to the new company to decide.
CHALLENGING MARKET REQUIRES FUNDAMENTAL CHANGE
Like the majority of the maritime industry, the car carrying and ro-ro markets have been challenging for years. The proposed structure is necessary to rectify the fact that Wilhelmsen’s shipping activities are underperforming.
In addition, the markets in which the companies operate are going through rapid change and require a more agile and efficient business model.
By making fundamental changes, we will create a more cost-efficient structure and not least enable synergies between the ship operating companies. This is necessary to ensure a world leading company within the car and ro-ro -segment and to create a platform for future growth.
GOING FORWARD FOR THE GROUP
There will be no immediate changes for ship management, insurance service and ship service following the establishment of the new company.
Changes in one way or form over time is certain. Our key goal must always be to deliver the quality expected by our customer, irrespective of how they are linked to the Wilhelmsen group.
Wilhelmsen is much more than a shipping company, with more than 50% of underlying profit coming from logistics and maritime services. We are positioned to grow organically and through mergers and acquisitions, and have financial flexibility to act on the right opportunities. It all boils down to finding the perfect match, building on our core competencies and global network.
* 20% of EUKOR is owned by Hyundai Motor Group.