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Eagle Bulk Shipping and Star Bulk Carriers have agreed to merge in an all-stock deal that would create the world’s fourth-largest commodities transporter, making the new organization more attractive to large investors.
According to The Wall Street Journal, the deal, which is set to close in 2024, would create a company valued at roughly $2.1 billion.
Star Bulk Carriers shareholders will own 71% of the company while the remaining 29% will be owned by Eagle Bulk shareholders.
People familiar with the deal said that the merger was backed by the asset management company Oaktree Capital Management, which owned a roughly 25% share of both companies up until September 2023. Following the announcement, Oaktree cut its stake in Star Bulk from 25% to about 7% and sold its 28% stake in Eagle Bulk.
“Oaktree wants a strong merged entity as it gradually moves out of bulk shipping,” said one of the people close to the merger.
Petros Pappas, the CEO of Star Bulk, will serve as the chief executive officer of the newly-formed company.
“We have been focused on growing the company in order to improve our shareholder liquidity,” Pappas said. “With a substantially higher market capitalization as a combined company, and with the share repurchase from Oaktree completed, we will further increase our size while growing trading liquidity and float.”
The merger comes at a time when China has begun to restock its commodities market from exporters in Indonesia, Australia and Brazil, pushing daily freight rates for the largest dry bulkers to $40,000 from $10,000 at the beginning of 2023.
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