National Shipping Co. and Saudi Arabian Oil Co. (Aramco) have signed an agreement confirming that they will merge their fleets of oil tankers in a deal worth $1.3 billion.
National Shipping will pay $832.8 million and issue 78.8 million new shares at $5.93 to Aramco's Vela International Marine Ltd. unit, amounting to a 20 percent stake in the company.
The deal will make National Shipping the owner of the fourth largest fleet of crude oil tankers in the world, and the sole transporter of Saudi Aramco products, as confirmed by long-term contracts.
National Shipping's new fleet will include 20 chemical tankers, 4 refined product tankers, and 16 more tankers under construction. Saudi Aramco said the deal will "expand the ability of Saudi Aramco and the Kingdom to meet future maritime transport needs for its expanding downstream businesses."
The two companies will sign the final paperwork to complete the merger at the end of 2013. both National Shipping and Aramco are also exploring more ways to increase their cooperation in the shipping industry.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com More