During Nor-Shipping earlier this month, our Head of Offshore, Robert Day, joined industry professionals to speak at Marine Money’s Norway Ship and Offshore Finance Forum.
His presentation ‘Making Sense of Consolidation, The Data Behind Decision Making’ focused on the Tidewater GulfMark merger as well as a potential future super merger between Harvey Gulf and a European owner.
The fleet values for each company as of January 2019 were as below, seen alongside their combined value. Of course, growing the fleet to over USD 1 billion is an advantage, but there is much more behind the merger.
The merged company is the largest OSV and OCV owner by number of vessels (excluding Lay vessels). Higher than the likes of Edison Chouest Offshore, Bourbon and Solstad Offshore, but with the refinancing process complete, they emerge with a clean balance sheet ready to ride the market recovery.
Another strategic advantage of the merger between Tidewater and GulfMark was the regional presence of each company. GulfMark, from its office in Aberdeen, had an oar in the often lucrative North Sea spot market, but also a strong global presence in the South East Asia market. Tidewater did not, and now as the merged entity, they have much more of a foothold in the global market (highlighted in yellow below).
The companies would also have identified scrapping candidates in their older, laid up vessels. This is important not just for them but also for the market. This is significant because the more excess supply there is, the longer it will take for the market to recover. The inactive vessels will be reactivated by shipowners as charter rates increase, but in doing so they will add to vessel supply and increase vessel competition for open charters, driving the rates back down. The new entity of Tidewater scrapping its older vessels alleviates this.
As followers of the Offshore market will know, Harvey Gulf Marine was one of the potential suitors in this Tidewater GulfMark merger. The company is still open to a merger, and with two of the major USA owners off the table, where else might they look? The answer… Europe.
Out of the potential suitors, looking at the data, Solstad Offshore looks to be the best option. Its smaller yet very high quality fleet could provide great potential for Harvey Gulf to expand its presence globally.
Mergers are the prime method of survival in this market, but done correctly, can provide the perfect springboard for future domination of the market.
The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.
Please Contact Us at：