BW LPG, a Singapore-based liquefied petroleum gas shipping (LPG) transportation fleet owner has proposed to merge with US-based LPG shipping company Dorian LPG in an all-stock transaction, valued around $1.1bn.
The merger is expected to create a major operator of LPG vessels with expanded geographical coverage, said BW LPG.
Further, it said that Dorian brings a sizeable fleet of modern assets having an average vessel age of 3.9 years to its fleet that would offer improved capabilities to serve customers more efficiently.
The combined company would be owner and operator of modern very large gas carriers (VLGCs), with 73 total vessels in its fleet. Included in these are 70 VLGCs, and three large gas carriers (LGCs), with a total fleet capacity of 6.0 million cubic meters.
Dorian on its website has claimed to own 22 modern VLGCs, which include 19 new 84,000m3 ECO-design VLGCs and three 82,000m3 VLGCs.
As per the terms of the deal, BW LPG will offer 2.05 of its shares in exchange for each Dorian share. After the merger is completed, Dorian would hold a stake of 45% in the combined company with BW LPG holding the remaining stake.
The merger proposal is being backed by a common investor BW Group, which holds nearly 45% stake in BW LPG, and 14.2% in Dorian.
BW LPG CEO Martin Ackermann said: “Our proposal represents a unique and compelling opportunity to maximize value for both Dorian and BW LPG shareholders.”
Ackermann added that the proposal also gives an opportunity to Dorian shareholders to benefit from ownership of an enlarged company with improved trading liquidity that is better placed for long-term growth and success.
Dorian confirmed that it has received an “unsolicited proposal” from BW LPG and that its board of directors will review the proposal in consultation with its financial and legal advisors.
The US-based company said that no assurance can be given that the proposal could lead to a transaction.