MSC Launches $700 Million Bid for GCC

Leading Maritime Player Seeks Expansion in Car Carrier Sector

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MSC has initiated a substantial move by announcing a public tender offer totaling $700 million for Gram Car Carriers (GCC), the third-largest car carrier capacity provider globally. This strategic maneuver is poised to respond to a potential agreement between both maritime entities. The offer, amounting to 263.69 Norwegian Kroner (NOK) per share (equivalent to $24.01 USD), was executed through Shipping Agencies Services (SAS), an MSC subsidiary, representing a premium of 28.3% over GCC’s share price as of April 23.

GCC, listed on the Oslo Stock Exchange, reported a revenue accumulation of $794 million at the end of the first quarter. Notably, a primary group of shareholders, including the Board of Directors and the executive management, who collectively own approximately 55.85% of the capital, will consider accepting the offer subject to specific conditions. Additionally, F. Laeisz, AL Maritime, Glenrinnes Farms, HM Gram Investment, and HM Gram Enterprises, holding around 54.54% of shares, have irrevocably committed to accepting the transaction.

“The voluntary offer today from one of the world’s leading maritime groups is a validation of GCC’s unique position as a premier provider of automotive transportation capacity and the long-term commitment of our entire team. The Board is satisfied that the offer represents a fair valuation of GCC, as reflected in the recommendation to shareholders to accept the offer,” stated Ivar Myklebust, GCC’s Chairman.

The acceptance period will commence no later than May 31 and will remain open for at least 20 days. It is anticipated that the agreement will be finalized during the third quarter or no later than the fourth quarter of 2024.

Car Carrier Transport Sector

The car carrier business has been among the most popular segments of maritime transportation in recent years, as indicated by a recent report from Clarksons Research. Experiencing a remarkable resurgence, it rebounded by 38% between 2021 and 2023 after a 20% decline caused by the Covid-19 pandemic in 2020. The estimated total seaborne transport in 2023, amounting to 24.2 million vehicles, surged by 15% compared to pre-pandemic levels, significantly surpassing the overall global maritime trade growth (+2.3%).

MSC’s interest in GCC’s fleet of 18 self-owned containerships presents business elements familiar to the MSC Group, which already operates two vessels of 6,700 CEUs and regularly transports a substantial volume of cars in containers, according to the Oslo presentation outlining the offer. “GCC… and its operational and management expertise will be of great value to the MSC Group in the future, while simultaneously allowing the Group and its customers to benefit from the global logistics experience and footprint of the MSC Group,” it states.

Other global shipping lines, such as CMA CGM and HMM, have also opted to expand their presence in the car carrier transport sector, either through chartering or acquiring new capacity.

Cash-rich post the remarkable freight rate hikes resulting from the pandemic, MSC has diversified its investments beyond its core cruise and container businesses in recent years, including aviation, rail, media, and logistics.

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