News
Samskip and Geest North Sea Line agree to merge
New venture will create Europe's largest intra-European shortsea intermodal container operator
The Icelandic shipping-to-logistics company Samskip is set to acquire full control of the Dutch intermodal operator Geest North Sea Line in a deal that will create Europe's largest intra-European intermodal/shortsea container shipping network. Including charter vessels, the combined operation will deploy a fleet of over 20 vessels ranging in size from 200 TEU to over 900 TEU.
With the acquisition of Geest, it is estimated that the total turnover of Samskip will rise from Euro250 million (in 2003) to Euro 500 million with the shortsea division at approximately Euro 300m accounting for around 60% of Samskip's total turnover.
During the negotiations, Samskip was advised by the Corporate Finance Department of Fortis Bank while Geest was advised by Boer & Croon of Amsterdam.
The joint company will offer a network of shortsea services encompassing the Baltic Sea, the North Sea, Ireland and Iberia while, over Rotterdam, intermodal (road, rail and inland waterway) links will extend the new venture's coverage to encompass most of mainland Europe south to Italy and eastwards to Austria, Slovakia and the Czech Republic.
Announcing the news, Samskip's Chairman Ólafur Ólafsson explained how the two companies had come together:
"Since the mid 1990s, Samskip has been pursuing a programme of expansion and diversification, reducing its dependency on simple port-to-port shipping and widening its geographical coverage. We are now in a strong position in the trades linking Iceland, Scandinavia and Baltic Sea ports with the UK and North Continent but we recognised a need to expand our coverage in the highly competitive North Sea arena where intermodal links to inland destinations such as central and southern Germany, Italy and Austria are key."
"Geest North Sea Line is comfortably the leading player in this market, its constant innovation - the 45ft palletwide (pw) container, the 45ft palletwide reefer and, most recently, the 45ft curtainsider - resulting in it steadily winning new business in direct competition with trailer operators. It was natural for us to start talking to Geest, initially with a view to cooperation."
Jacob van Geest, who co-owns Geest North Sea Line's parent company Geest Nederland BV together with his two brothers, continues the story:
"The board of Geest North Sea Line had identified the Baltic Sea as the next stage in our expansion and were looking for a partner too. When Samskip made contact, it seemed a perfect combination. We have very similar business philosophies and there were no conflicts of interest. Despite both of us having substantial service networks, there were no overlaps. We were a perfect match.
"Initially unbeknownst to Samskip, we at Geest were also discussing our longer term future. Geest North Sea Line is a family-owned company and this could not continue; there were no younger members of the family who relished entering a business that requires major longterm investments and commitments. At the age of 61, I had to address this problem.
"The rest of the story is quite simple. Samskip saw that by buying Geest, it would become overnight the leading carrier in the North Continent/UK/Ireland trades while Geest believed that the acquisition would enable it to advance its ambitions in the best interests of not only the company but also its employees and customers. It then became just a matter of hammering out the detail.
"We were particularly focused on protecting the interests of our employees. They have been the driving force that has made Geest such a major force on the European intermodal scene and the deal with Samskip is very much in their interest. Not only will Samskip's ownership take Geest forward in the ways we intended but the lack of overlap between our respective services means that we are not facing those difficult situations where we have a lot of duplication in job functions.
"We firmly believe that in Samskip, we have found a partner who can exploit the full potential of Geest North Sea Line, its management and its staff."
Samskip and Geest Nederland have now reached agreement in principle and the two parties expect to finalise the deal sometime between the middle and the end of March. The current board of directors of Geest North Sea Line will assume responsibility for the combined shortsea shipping operations of Samskip and Geest North Sea Line under the chairmanship of Samskip President Àsbjörn Gíslason, who takes over from Mr van Geest. Wout Pronk will continue as Managing Director, Gerard de Groot as Commercial Director, John Oprel as Finance Director and Paul Swaak as Operations Director.
Based like Geest in Rotterdam, Mr Gíslason is one of two presidents within the Samskip Group and has responsibilities for the company's international operations. His counterpart in Iceland, Knútur G Hauksson, has broad-ranging responsibilities for Samskip's operations in Iceland which include shipping, forwarding and logistics.
The shortsea and intermodal operations of Samskip and Geest North Sea Line will be fully integrated under Geest North Sea Line's management, explains Mr Pronk:
"Both parties agreed to merge their operations utilising the strengths, brands and infrastructure of the two organisations.
"We will be concentrating on achieving maximum utilisation from our fleet of 45ft pw containers. The new venture will have at its disposal nearly 8,000 containers, most of which are 45ft dry freight boxes with the balance comprising new 45ft curtainsiders and reefers together with a number of 40ft pw units. These will be the tools that will enable the company to grow its business in the future."
Mr Gíslason is confident that customers will see the benefits resulting from this integration very quickly:
"We will have a fleet of more than 20 ships at our disposal and we are now working out the most effective deployment of these vessels to provide the best transit times, frequencies of sailings and use of equipment. We aim to provide our customers with services that are perfectly tailored to their needs both today and in the years to come."
He concludes:
"We are delighted to be acquiring Geest as the vehicle and platform to expand our activities further. This is a clear signal to our employees, customers and suppliers that we are committed to the business we are in."
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Geest Ireland Ltd, in which Geest North Sea Line has a 60% interest, operates intermodal routes between Ireland and Continental Europe. It has three weekly departures.
Geest's container pool consists of over 5,500 x 40/45ft palletwide containers, the majority of which are 45ft units.
Geest North Sea Line BV is a 33% shareholder in Coolboxx, a specialist transport company focused on moving temperature-controlled cargo via the 45ft container concept.
Geest offers convenient "one stop shopping" services to many of its customers as well as "just-in-time" deliveries and door-to-door operations. It transports cargo deep into Europe including: Germany, Switzerland, Italy, Austria, Spain as well as Holland, Belgium, Denmark, Luxembourg, Hungary, the Czech Republic, Slovakia, and parts of the former Yugoslavia.
For further information:
Samskip: Àsbjörn Gíslason, tel: +31 10 428 5050
Geest North Sea Line: Wout Pronk / Gerard de Groot, tel: +31 10 491 2345
Photographs of personnel and vessels are available upon request from Dunelm. Please email either davidcheslin@dunelmpr.co.uk or sharoncunningham@dunelmpr.co.uk.
Issued on behalf of:
Samskip BV
Den Hamweg 30
3089 KK Rotterdam
The Netherlands
Geest North Sea Line
Seattleweg 15
3195 ND Rotterdam
The Netherlands
