Report claims Tallink will swallow up Silja

  • 2005-09-21
  • From wire reports
TALLINN - A Finnish business magazine stirred emotions last week when it published a prediction that Finland's Silja Line would snap under the competition and Estonia's Tallink Group would take over its routes.

The magazine, Talouselama, quoted a maritime expert as saying that Finland's two shippers, Silja and Viking, have exhausted each other and are not in financial condition to renew their fleets, something Tallink is busy doing right now.

Jorma Taina, a maritime trade professor at the Turku School of Economics, said that Viking was not in imminent danger yet thanks to its solid sales, but Silja's poor financial results have started to drag down the Sea Containers group. It is likely the mother company will put Silja on sale, he said.

In the expert's opinion, only Tallink would be interested in buying Silja.

"Tallink is the only shipping line that would be able to make a profit on the route in the present situation. It would be a perfect deal, and Tallink would make history with it. The new Tallink would become the biggest shipping line in the northern Baltic, operating in the competition-free triangle of Helsinki-Tallinn-Stockholm," Talouselama writes.

The journal points out that Silja's most valuable asset is the Helsinki-Stockholm shipping route, which Tallink would probably want to acquire.

Tallink, however, reacted sharply to the article, calling any acquisition plans a "fabrication."

"This is journalistic speculation, and Tallink has no wish to further comment on the subject," Tallink CFO Janek Stalmeister said.

Kustaa Aima, a manager at Danske Capital, an investment bank and one of Tallink's owners, told the Aripaev business daily he has not heard about plans to take over Silja Line.

Another Tallink board member, Keijo Mehtonen, said he only believed in Tallink's rapid development and that managers would continue renewing the shipper's fleet.

Meanwhile, Silja Line officials also shrugged off the rumors. Meelis Laido, chairman of the company's Estonian operations, said he knew nothing of the rumored takeover plans. He added, however, that he had been invited to a meeting of the Finnish firm's management in Helsinki on Sept. 21.