SHARE
AGREEMENT BETWEEN FINCANTIERI – LLOYD WERFT – BIG
04 mag 2006
04 mag 2006
Fincantieri creates an international network for refitting and refurbishment services acquiring a shareholding in the German shipyard Lloyd Werft
Fincantieri – Cantieri Navali Italiani S.p.A and Bremer Investitions-Gesellschaft mbH (BIG), the service provider for regional and business development in the state of Bremen, have signed an agreement with the current shareholders of Lloyd Werft Bremerhaven GmbH for the acquisition of a shareholding in Lloyd Werft.
Transaction rationale
This agreement will extend Fincantieri’s presence in the market of ship refitting and refurbishment services and represents the first stage of an industrial and commercial cooperation between the Italian shipbuilding group and the German shipyard.
Fincantieri, combining the strengths and capabilities of the German shipyard with its yard in Palermo, has taken a significant step forward in its strategy to create the basis for an overarching and unique network in ship refitting and refurbishment services, a business segment historically characterized by a very high fragmentation. The strategic location of the two shipyards in the North Sea and in the Mediterranean Sea, will strengthen Fincantieri’s position in the areas where a significant part of the cruise and ferry fleets is operating.
Fincantieri and Lloyd Werft will act as prime contractor for ordinary and extraordinary maintenance and upgrading services, offering technical support and assistance in planning and running maintenance programmes. Both companies have solid expertise in this role due to their proven experience in services planning, through preliminary on board inspections, design and engineering activities, dock occupancy scheduling, coordinating and carrying out procurement as well as managing the shipyard activities.
The excellent technical competences of Lloyd Werft in ship repairs and conversions, deriving from over one hundred years of presence in this market segment, together with the strong production and technological capabilities of Fincantieri, will contribute to meet overall clients expectations, guaranteeing high quality services with short lead time.
The Market
Forecasts estimate a strong growth in the next few years for the segment of ship repairs and conversions due to the planned expansion of the cruise and ferry fleets worldwide. This growth is driven by a steady increase of cruise passengers and of both passengers and trailers on ferries. Growth rates for these markets are expected to reach 8% per year for cruise passengers for the period 2006-2014 and 6% for trailers transportation demand for the period 2006-2010.
Market forecasts indicate an expected average growth rate, for the period 2006-2013, of 12% in demand for drydocking services. This solid demand trend is further strengthened by the increasing innovation in shipbuilding, which leads owners to upgrade the existing fleet in order to fill the gap with the higher standards of new generation ships.
Details of the agreement
Fincantieri and BIG will acquire 21.05% and 13.16% respectively of the share capital of Lloyd Werft through a capital increase. The remaining shares will be held by the current shareholders. The full effectiveness of the Agreement will be subject to the final approval from the EU Commission and the German Antitrust Authority.
Moreover, Fincantieri will have the right, by the end of 2008, to reach the majority by acquiring further shares from the current shareholders.
Fincantieri – Cantieri Navali Italiani S.p.A and Bremer Investitions-Gesellschaft mbH (BIG), the service provider for regional and business development in the state of Bremen, have signed an agreement with the current shareholders of Lloyd Werft Bremerhaven GmbH for the acquisition of a shareholding in Lloyd Werft.
Transaction rationale
This agreement will extend Fincantieri’s presence in the market of ship refitting and refurbishment services and represents the first stage of an industrial and commercial cooperation between the Italian shipbuilding group and the German shipyard.
Fincantieri, combining the strengths and capabilities of the German shipyard with its yard in Palermo, has taken a significant step forward in its strategy to create the basis for an overarching and unique network in ship refitting and refurbishment services, a business segment historically characterized by a very high fragmentation. The strategic location of the two shipyards in the North Sea and in the Mediterranean Sea, will strengthen Fincantieri’s position in the areas where a significant part of the cruise and ferry fleets is operating.
Fincantieri and Lloyd Werft will act as prime contractor for ordinary and extraordinary maintenance and upgrading services, offering technical support and assistance in planning and running maintenance programmes. Both companies have solid expertise in this role due to their proven experience in services planning, through preliminary on board inspections, design and engineering activities, dock occupancy scheduling, coordinating and carrying out procurement as well as managing the shipyard activities.
The excellent technical competences of Lloyd Werft in ship repairs and conversions, deriving from over one hundred years of presence in this market segment, together with the strong production and technological capabilities of Fincantieri, will contribute to meet overall clients expectations, guaranteeing high quality services with short lead time.
The Market
Forecasts estimate a strong growth in the next few years for the segment of ship repairs and conversions due to the planned expansion of the cruise and ferry fleets worldwide. This growth is driven by a steady increase of cruise passengers and of both passengers and trailers on ferries. Growth rates for these markets are expected to reach 8% per year for cruise passengers for the period 2006-2014 and 6% for trailers transportation demand for the period 2006-2010.
Market forecasts indicate an expected average growth rate, for the period 2006-2013, of 12% in demand for drydocking services. This solid demand trend is further strengthened by the increasing innovation in shipbuilding, which leads owners to upgrade the existing fleet in order to fill the gap with the higher standards of new generation ships.
Details of the agreement
Fincantieri and BIG will acquire 21.05% and 13.16% respectively of the share capital of Lloyd Werft through a capital increase. The remaining shares will be held by the current shareholders. The full effectiveness of the Agreement will be subject to the final approval from the EU Commission and the German Antitrust Authority.
Moreover, Fincantieri will have the right, by the end of 2008, to reach the majority by acquiring further shares from the current shareholders.