Wilh. Wilhelmsen ASA

M&A Activity • Dec 22, 2016

Wilhelmsen and Wallenius sign transaction agreement to merge their jointly owned investments

Wilhelmsen and Wallenius sign transaction agreement to merge their jointly owned investments

Wilhelmsen and Wallenius merge to form world-leading

shipping and logistics platform

On 5 September 2016, Wilh. Wilhelmsen Holding ASA and

Wilh. Wilhelmsen ASA (WWASA) signed a letter of intent

with Rederi AB Soya and Wallenius Lines AB, whereby it

was agreed to establish a new ownership structure for

their jointly owned investments.

As of today, the parties have signed a transaction

agreement, as detailed in a stock exchange notice from

Wilh. Wilhelmsen ASA dated 22 December 2016.

The main terms include:

- At the day of the merger, Wallenius Lines and

Wilh. Wilhelmsen Holding will hold 48% and 37.8%

respectively. Minority shareholders in WWASA will hold

the remaining 14.2% of the shares.

- Subsequent to completion of the merger, it is

agreed that Wallenius shall reduce its shareholding in

order to reach the same ownership level as Wilh.

Wilhelmsen Holding ASA has in WWASA. Subject to

certain conditions, at least 25% of the shares shall

be sold within four weeks after completion of the

merger. The remaining shares shall be sold no later

than three weeks after the second quarterly reporting

of WWASA following completion the merger. Following

the reduction, Wilhelmsen's and Wallenius' proforma

ownership will be 75.6%, and this is expected to

facilitate a significantly improved trading liquidity

in the WWASA shares.

- In relation to the 75% remaining shares, Wilh.

Wilhelmsen Holding ASA has entered a risk sharing

agreement with Wallenius, where Wilh. Wilhelmsen

Holding ASA and Wallenius will equally share any

upside if the shares are sold for more than NOK 32.50

per share and downside if the shares are sold for less

than NOK 22.50 per share. Until all of the shares have

been sold, Wallenius shall at possible general

meetings of WWLASA not vote for more than the total

number of shares held by Wilh. Wilhelmsen Holding ASA.

- Wilh. Wilhelmsen Holding and Wallenius Lines

have enter into a limited shareholders' agreement

dealing with board representation and a right of first

refusal if either of the parties sell below 20%.

Further, the parties have agreed a twelve months "stay

away period", in which neither party are allowed to

increase their holdings in the new combined entity.

The agreement shall remain in force until 31 December

- Closing of the merger is expected early April,

subject to relevant regulatory and shareholders'

approvals.

"The markets in which our shipping and logistics

entities operate are going through rapid change and

requires a more agile and efficient business model. We

are happy to have reached an agreement with our

Swedish partners creating an agile, world-leading,

sustainable shipping and logistics platform," says

Thomas Wilhelmsen, group CEO at Wilhelmsen.

"In addition to establishing one common, more

efficient owner and governance structure, the proposed

merger is expected to enable substantial synergies by

combining the assets and harvesting economies of

scale, including more optimal tonnage planning, and

administrative, commercial, and operational

efficiencies between the entities," says Thomas

Wilhelmsen, group CEO at Wilhelmsen.

Further to the prospects for the new entity, the board

of Wilhelmsen states that: "Not only will we create a

world leading transporter of car and ro-ro cargoes,

but the proposed merger will also facilitate a growth

path for the land-based logistics offer where we

expect new investments and development of products and

services going forward."