Estonian shipping company Tallink has launched out on a 450 million euro take-over of the Silja line to create one of the largest maritime syndicates on the Baltic Sea.
On June 12 Tallink announced it had reached an agreement with Sea Containers Ltd to purchase the stock of Silja for 450 million euros and 5 million of its own shares.
Tallink a major connecting line between Estonia, Finland, Sweden, Germany and the Baltics, while Silja services routes between Sweden and Finland.
Company chairman Enn Pant said the merged company would be the leading cruise and passenger line across the Baltic Sea, and would also be an important cargo carrier in the region.
"Tallink's bold and successful growth strategy is boosted by Silja Line's long history, valuable brand and outstanding professionals. This transaction is firmly founded in our conviction that clients, employees as well as shareholders will benefit form the integration of these two shipping companies," Pant said.
The deal has not affected shipping schedules for either company. Both lines will continue to operate under their current brandings, and their vessels will continue to fly under their current flags. Tallink said it would ensure none of Silja's employees were adversely affected in the deal.
Tallink's shares on the Tallinn Stock Exchange rose about 4 per cent in early trading following the announcement, reaching a high of 3.96 euros. Investors will be hoping the deal will turn around a poor year of economic performance which has seen the company's share price drop from 5.82 euros in 2005.
In a letter to the stock exchange, the company said it would have to borrow 400 million euros to finance the deal, and would seek to raise another 50 million euros in equity by offering additional shares to its existing shareholders. The sale will be subject to approvals from competition authorities and approval from Tallink's shareholders.
Silja's fleet of six ships will merge with Tallink's fifteen, creating a maritime syndicate that will carry approximately 6.6 million passengers a year, and employ some 5300 people. The companies' combined revenue in the last financial year was 640 million euros.
However Sea Containers Ltd has held on to control of the SuperSeaCat fast ferry service between Helsinki and Tallinn.
