Scrubber maker’s merger aids expansion in Indonesia
Norway-based Clean Marine and Indonesian engineering specialist FMSI have announced that the companies have entered into a term sheet pursuant to which they will effect a business combination to create a leading provider of exhaust gas cleaning systems.
The combined entity, which will operate under the name Clean Marine, will provide a fully integrated offering, including OEM expertise, significant capacity, fast production times, project management and global after-sales services. It will also offer financing to its customers through affiliated companies.
The Merger will better position Clean Marine to fulfil the needs of its customers and meet the rising demand for scrubbers following the implementation of the IMO 2020 sulphur cap. Price volatility, large fuel spreads and fuel quality concerns are causing owners who had previously not adopted a strategy for compliance to invest in scrubbers. Approximately 490 Clean Marine employees will serve clients around the world from offices in Oslo, Norway; Varna, Bulgaria; Singapore; Houston, USA; and Batam, Indonesia.
“We are very pleased to announce the contemplated merger on the eve of IMO 2020 coming into effect,” said Nils Høy-Petersen, CEO of Clean Marine. “The transaction will provide additional scale to support our global operations and continued investment in developing the best possible product and services for our customers.”
The combined company will be able to deliver higher manufacturing volumes and shorten delivery times further, to shipowners’ benefit. In total, the companies have on order approximately 260 scrubber systems. The combined company will also enhance its R&D efforts to develop further competitive green technologies for shipowners as well as for other industries.
“This is a significant milestone in FMSI’s history, and we are delighted to announce this intention to combine with Clean Marine,” said Nicolas Busch, shareholder and acting CEO of FMSI. “We expect the combined company will achieve a substantial increase in market share and create a strong foundation for pioneering compliant scrubber technology for years to come.”
Access to competitive financing of scrubbers can be a bottleneck for many shipowners. Later this year, Clean Marine will begin offering attractive equipment leasing through an affiliated company, thereby enabling shipowners to retrofit vessels with minimal upfront capex.
The term sheet forms the basis for the negotiations of the Merger. It is the intention of both companies to execute definitive documentation to complete the Merger swiftly. The Merger is subject to agreement on the terms of the final transaction agreements, customary due diligence reviews, any required approvals by regulatory authorities and other customary conditions.
Should the companies complete the Merger, Nils Høy-Petersen will become CEO of the combined company. The merged company will have equal shareholdings from the companies’ owners.