MSC to re-enter car carrier market with Gram Car Carriers takeover

MSC is joining its peers in tapping into the red-hot car carrier market. The Swiss-Italian container shipping leader is bidding NOK7.64 billion (US$700 million) for Norway’s Gram Car Carriers (GCC).

MSC made the bid through its subsidiary, SAS Shipping Agencies Services. The bid amount, amounting to NOK272.69 (US$24.89) per share, represents a premium of approximately 28% to the closing trading price of Gram’s shares on 23 April, and a premium of around 78% of the average trading price of the company’s shares over the last year.

GCC’s directors have unanimously urged shareholders to accept MSC’s offer, calling it financially fair.

“Today's voluntary offer by one of the world's leading maritime groups is a validation of the unique position GCC has built as a leading car shipping tonnage provider and the long-term commitment put in by the entire team. The board is satisfied that the offer represents a fair valuation of GCC, as is also reflected in the recommendation to shareholders to accept the offer," commented GCC’s chairman, Ivar Myklebust.

The company’s largest shareholders (F. Laeisz GmbH, AL Maritime Holding - holding company of boxship tonnage provider Asiatic Lloyd -, Glenrinnes Farms, HM Gram Investment III and HM Gram Enterprises), which hold approximately a total of 54.54% of GCC’s stocks, have given irrevocable undertakings to accept MSC’s offer.

MSC has pledged to retain Gram’s name and to continue its current operations.

Regarding the company's financial performance, GCC’s 2023 net profit nearly quadrupled from 2022 to US$94 million, as car carrier charter rates reached historically high levels of US$115,000/day that year. In Q1 2024, Gram’s net profit more than doubled from the year-ago period to US$31.2 million.

It is important to mention that in March 2023, MSC sold MSC Cristiana and MSC Immacolata, the only two car carriers in its fleet, to Greek owner Niki Shipping.

Flush with cash from the Covid-19-powered boom, major players in the container segment, such as CMA CGM, HMM and Seaspan Corporation, turned their attention to the rejuvenated car carrier sector from 2022, as box freight levels normalised. Investment in car carriers regressed as the pandemic compelled people to telecommute, resulting in inadequate tonnage to carry cars as vehicle demand recovered post-pandemic.

On the other hand, in November 2023, Maersk sold its 10.2% stake in GCC’s compatriot peer, Hoegh Autoliners, for about US$168.8 million, sparking speculation that the Danish group could be planning to start its own car carrier operations.

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