Boskalis and Smit announce merger

Boskalis and Smit aim to affect the transaction through a public offer of €60 in cash by Boskalis for all outstanding shares in Smit.

The business combination will create major maritime service provider offering a platform for further growth. Boskalis and Smit have agreed that the existing business plans will serve as the basis for the further expansion of the Group and that further growth and development of all current activities will be supported.

In view of the strong reputational and brand value, the activities of Smit will be continued under the Smit name operating out of the current head office in Rotterdam. The terminals activities of Smit and Boskalis’ associate Lamnalco will be integrated, thereby creating a global player in the maritime oil and gas terminal arena. Activities with regard to harbour towage will create synergies in the area of exchanges, procurement and the crewing of vessels.

Peter Berdowski, CEO of Boskalis said this morning, ‘I am very enthusiastic about this merger. Combining our companies creates a Dutch maritime player of a global scale. The merger fits excellently with our strategy aimed at reinforcing and expanding our maritime services. I see significant opportunities for synergies between our companies complemented with a close competence and cultural fit. I support the strategy of Smit, which aligns and complements well with our strategy. Moreover, the merger offers an excellent platform for the further growth of our combined activities.’

Smit CEO Ben Vree added, ‘Our discussions and shared vision have also made me enthusiastic for this merger. We are very thrilled with the support from Boskalis for the Smit strategy and its four divisions. This is a good basis for the further development of our combined activities. We have a clear agreement regarding the continuity of Smit’s identity and its strategy thereby securing the continuity of Smit’s activities. This merger offers an excellent opportunity for Smit.’

The large shareholders in Smit, Delta Lloyd Groep and Janivo Beleggingen have already confirmed an irrevocable undertaking to support and accept the intended offer, subject to customary offer conditions. Together with Boskalis’ own shareholding in Smit, this accounts for approximately 44% of the outstanding shares in Smit.

Any direct implications for the workforce will be limited as a consequence of the complementary nature of the merger. Boskalis and Smit will make best efforts to avoid any forced redundancies. Ben Vree will become a member of the Board of Management of the Group and Smit will also have a representative within the Supervisory Board of the new combination.

Boskalis and Smit will strive to sign a merger protocol shortly and to obtain all the necessary approvals and statements from regulators and competition authorities as soon as possible and to complete the required recommendation and consultation procedures with the workers council and unions before launching a formal Offer. The transaction is expected to be fully completed in the first half of 2010. The completion is subject to satisfying a number of customary conditions, including approval from the competition authorities.

The intended capital structure of the Group will continue to be strong. The financing of the offer will consist of a combination of senior debt and approximately €300m of equity/junior debt. Part of the financing is expected to include the issuance of €200m of new Boskalis shares.