DFDS seals Norfolkline purchase

DFDS has bought ferry operator Norfolkline from AP Moller Maersk in a €346m (US$496.7m) deal, which also sees Maersk taking a 28% share in DFDS.

DFDS’ CEO Niels Smedegaard described the acquisition as “the perfect match” and pointed out it would give it access to the cross-Channel and Irish Sea markets.

Smedegaard said: “Norfolkline is a leading ferry and logistics company with a strong route network covering the North Sea, the Channel and the Irish Sea, combined with a considerable logistics operation.

“This means, that DFDS’ network is expanded to include two new markets, the Channel and the Irish Sea, we can combine our operations on the North Sea, and our ability to secure volumes for the network is greatly strengthened.

“Through this acquisition we gain scale and come closer to our vision of building a European sea based transport network.

“The integration of our companies will generate considerable synergies and we expect this transaction to improve our earnings capability once the market recovers.”

Maersk said the deal would enable DFDS to secure new volumes through a much wider logistics network and strategic port access.

It said: “The key focus areas for the new company during the initial integration phase will be to generate revenue growth through wider market coverage, to consolidate ro-ro shipping and port terminal operations on the North Sea and to improve capacity utilisation of the route network.”

The deal sees DFDS get Norfolkline for a cash payment of €170m and a 28.8% share worth roughly €176m, based on current market prices.

Maersk will also take shares in DFDS’ major shareholder Lauritzen Fonden, giving it a total share in DFDS of around 31%.

DFDS’ acquisition of Norfolkline creates combined pro forma revenues of €1.5bn in 2009 with an operating profit of €139m.

Norfolkline operates a total of 18 vessels on the Irish Sea, North Sea and Cross Channel, and owns a port terminal in Vlaardingen and operates another four port terminals. Norfolkline’s logistics activities comprise 28 offices in 11 countries.

DFDS operates ro-ro, container, passenger, terminal and trailer services in northern Europe and the Baltic region with 60 vessels.

Two of Norfolkline’s ships will not be included in the acquisition as they have already been sold to other parties.

The deal is subject to approval from competition authorities.