Saltchuk Welcomes Overseas Shipholding Group to Its Family of Companies

Rhea-AI Summary

Saltchuk Resources successfully completed its acquisition of Overseas Shipholding Group (OSG) for $8.50 per share, valuing the transaction at approximately $950 million. OSG will now operate as a wholly-owned subsidiary within Saltchuk's diversified business portfolio, which includes domestic and international shipping, logistics, marine services, energy distribution, and air cargo. The acquisition adds over 8,500 employees to Saltchuk. The deal, first announced on May 20, 2024, concluded following the expiration of the Hart-Scott-Rodino Antitrust waiting period on June 26, 2024. With the completion of the transaction, OSG's shares will be delisted from the NYSE and deregistered under the Securities Exchange Act of 1934.

Positive

• Saltchuk's acquisition of OSG for $8.50 per share, totaling an enterprise value of approximately $950 million.
• OSG adds over 8,500 employees to Saltchuk's workforce, enhancing operational capacity.
• OSG will join Saltchuk's diversified businesses, which include various sectors such as shipping, logistics, and energy distribution.

Negative

• OSG shares will cease trading on the NYSE and be delisted, affecting liquidity and marketability for current shareholders.

Financial Analyst

The acquisition of Overseas Shipholding Group (OSG) by Saltchuk for $950 million introduces significant implications for the financial landscape. Saltchuk's strategic move to incorporate OSG as an independently managed subsidiary expands its diversified portfolio, strengthening its foothold in energy shipping.

Short-term implications include the delisting of OSG from the NYSE prior to the opening of trading on July 10, 2024. This will result in an immediate liquidity event for OSG shareholders at the acquisition price of $8.50 per share. Investors should note that Saltchuk has financed this acquisition entirely in cash, indicating strong liquidity and financial health.

Long-term, the diversification into energy shipping could provide robust revenue streams for Saltchuk, especially considering the strategic importance of the domestic maritime industry. However, success will depend on seamless integration and management of OSG's operations while maintaining profitability in a volatile energy market.

Market Research Analyst

Saltchuk's acquisition of OSG signals a noteworthy consolidation within the maritime industry, specifically in energy shipping. Saltchuk now includes seven business units, enhancing its market presence and operational capabilities.

For stakeholders, this acquisition represents a diversification of risk and potential for stable, long-term profit generation. Considering Saltchuk's commitment to independent management of OSG, it is important to observe how market dynamics in energy shipping evolve and impact the combined entity's performance.

For retail investors, the merger could indicate a strengthened position in a critical sector, possibly leading to more consistent returns. However, the volatility seen in energy markets should not be overlooked and the efficiency of the integration process will be a key determinant of future success.

Legal Expert

The completion of the acquisition highlights a significant regulatory and compliance milestone, particularly with the expiration of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. This ensures that the transaction has met all necessary antitrust compliances, reducing potential legal risks associated with market monopolization.

For OSG shareholders, the legal framework has facilitated a clear and structured transition, culminating in the delisting of OSG shares from NYSE. This delisting signifies the transition from a publicly traded entity to a private subsidiary, which often brings about changes in governance, reporting requirements and operational transparency.

Investors should understand that while the regulatory clearance and tender offer completion reduce immediate legal risks, ongoing compliance and integration will remain critical for sustained legal and operational stability.

SEATTLE & TAMPA, Fla.--(BUSINESS WIRE)-- Saltchuk Resources, Inc. (“Saltchuk”) today announced that it has successfully completed its previously announced tender offer to acquire all of the outstanding shares of common stock of Overseas Shipholding Group, Inc. (NYSE: OSG) not already owned by Saltchuk for a purchase price of $8.50 per share in cash, an enterprise value of approximately $950 million. The transaction closed this morning, and OSG is now a wholly owned subsidiary of Saltchuk.

“With OSG, Saltchuk now numbers more than 8,500 people who share one thing in common: every day we strive to safely, responsibly, and reliably perform our services,” Saltchuk Chairman Mark Tabbutt stated. “As with our other businesses, OSG will remain standalone and independently managed. We look forward to working alongside the OSG team as we move forward together.”

OSG joins Saltchuk as its seventh business unit, adding energy shipping to its diversified lines of business which include domestic shipping, international shipping, logistics, marine services, energy distribution, and air cargo.

Sam Norton, OSG’s President and Chief Executive Officer remarked, “The transaction with Saltchuk marks a significant development in the long history of OSG and we are very pleased that it has been successfully completed. Leadership at both of our companies sees the value of having our business lie within the Saltchuk family of companies, an organization committed to sustaining the important role of the domestic maritime industry within the USA. The entire team at OSG looks forward to our future together.”

The proposed transaction was announced May 20, 2024 and the expiration of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 was announced on June 26th.

Computershare Inc. and Computershare Trust Company, N.A., acting as joint depositary and paying agent for the tender, have advised that, as of the expiration of the tender offer, approximately 47,770,076 shares of OSG common stock were validly tendered and not validly withdrawn pursuant to the tender offer, representing approximately 66% of the issued and outstanding shares of OSG common stock, which percentage does not include Saltchuk’s holdings.

As a result of the completion of the transaction, prior to the opening of trading on the New York Stock Exchange on July 10, 2024, all shares of OSG common stock will cease trading, and the OSG shares will subsequently be delisted from NYSE and deregistered under the Securities Exchange Act of 1934, as amended.

About Saltchuk Resources, Inc.

Saltchuk is a privately owned family of diversified freight transportation, marine service, and energy distribution companies, with consolidated annual revenue of approximately $5.5 billion and 8,500 employees. We believe in – and champion – the inherent value of our companies’ individual brands. The Corporate Home provides leadership and resources to our companies but not direct management of their operations. Saltchuk is a values-driven organization. We put safety first. We are reliable – we take care of our customers and conduct business with honesty and integrity. We are committed to each other, to protecting our environment, and to contributing to our communities in a work environment where anyone would be proud for their children to work. Additional information about Saltchuk, which is headquartered in Seattle, is available at www.saltchuk.com.

About Overseas Shipholding Group, Inc.

Overseas Shipholding Group, Inc. (“OSG”) provides liquid bulk transportation services for crude oil and petroleum products in the U.S. Flag markets. OSG’s 21 vessel U.S. Flag fleet consists of Suezmax crude oil tankers, conventional and lightering ATBs, shuttle and conventional MR tankers, and non-Jones Act MR tankers that participate in the U.S. Tanker Security Program.

OSG is committed to setting high standards of excellence for its quality, safety and environmental programs. OSG is recognized as one of the world’s most customer-focused marine transportation companies and is headquartered in Tampa, FL. More information is available at www.osg.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240710780735/en/

Susan Allan

sallan@osg.com

Source: Overseas Shipholding Group, Inc.

FAQ

What is the acquisition price per share for OSG by Saltchuk?

Saltchuk acquired OSG at $8.50 per share.

What is the total enterprise value of the Saltchuk and OSG transaction?

The total enterprise value of the transaction is approximately $950 million.

When was the Saltchuk and OSG acquisition first announced?

The acquisition was first announced on May 20, 2024.

When did OSG's shares cease trading on the NYSE?

OSG's shares will cease trading on the NYSE on July 10, 2024.

How many shares of OSG common stock were tendered in the offer?

Approximately 47,770,076 shares, representing about 66% of the issued and outstanding shares of OSG common stock, were tendered.