International law firm Clifford Chance, in conjunction with Al Jadaan & Partners Law Firm, has advised The National Shipping Company of Saudi Arabia (Bahri) in relation to the proposed $1.3 billion merger of the fleets and operations of Bahri and Vela International Marine Ltd., a wholly-owned subsidiary of Saudi Aramco. The definitive transaction documents were signed in Riyadh.
The merger of the fleets, personnel and business systems of Vela and Bahri, along with management responsibility for Saudi Aramco’s very large crude carrier (VLCC) transportation system, will be implemented within the corporate structure of Bahri. Upon completion of the proposed transaction, Bahri will become the fourth largest owner of VLCCs globally and will be able to develop its role as a national shipping champion in Saudi Arabia. Furthermore, under the terms of a long-term shipping contract, Bahri will become the exclusive provider of VLCC crude oil shipping services to Saudi Aramco for crude oil sold by Saudi Aramco on a delivered basis.
Under the terms of the proposed transaction, Bahri will pay Vela a total consideration (comprising cash and new shares in Bahri) of $1.3 billion, making this one of the largest M&A deals in Saudi Arabia announced this year. The proposed transaction is subject to a number of conditions, including the approval of the transaction and the related capital increase by Bahri’s shareholders at an Extraordinary General Assembly and receipt of required approvals from relevant regulatory authorities including, without limitation, the approval of the Capital Market Authority and Supreme Council for Petroleum and Mineral Affairs.
“We are delighted to have advised on such a key transaction in Saudi Arabia. The ability of our teams in Dubai and London, alongside Al-Jadaan & Partners Law Firm in Riyadh, to advice on a transaction of this significance and complexity reflects the combined strength of our leading regional corporate and equity capital markets practices,” Mike Taylor, corporate partner at Clifford Chance Dubai, said.
“We are very proud to have assisted Bahri in agreeing this transformational merger. Clifford Chance and Al-Jadaan’s ability to field an integrated team comprising personnel from multiple offices to advise across all shipping, corporate, competition and regulatory matters is testimony to our global transport and logistics sector expertise,” Nick Swinburne, asset finance partner at Clifford Chance London, added.