European Union regulators cleared Danish shipping line DFDS to complete its $425 million acquisition of rival roll on-roll off carrier Norfolkline from A.P. Moller-Maersk and to create the biggest freight ferry operator in northern Europe.
The deal was approved on condition DFDS concluded a space charter agreement with a rival carrier on routes between the UK and Denmark to address the EU's concern that the transaction would have led to a quasi monopoly on these trades.
DFDS has signed a new space charter agreement with Stena Line replacing its current deal with Norfolkline.
DFDS and Copenhagen-based A.P. Moller-Maersk, parent of ocean carrier Maersk Line, agreed to the cash-and-stock deal in December and said they hoped to close on the transaction in the second quarter of 2010.
DFDS has raised the estimate of annual cost savings from the merger to between $30 million and $36 million from an earlier estimate of $22 million.
Under the deal, Maersk acquired a 31 percent stake in DFDS, $209 million in cash and agreed to a 24 month lock-in period on the DFDS shares. It is expected to eventually sell the stock.
DFDS said the EU's approval of the deal has cleared the way for a share sale worth around $83 million and a share issue to A.P. Moller-Maersk.
Norfolkline has a fleet of 18 ships and transported 1.2 million trucks and trailers on port-to-port and door-to-door services in the North Sea, English Channel and Irish Sea in 2008. It was acquired by Maersk in 1985.
The merged carrier will operate the largest freight and passenger route network in northern Europe, stretching from Russia to Ireland with a fleet of 73 ships and around 6,200 employees.
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