STX takes over Aker

On Monday STX more than doubled its participation in Norway’s Aker Yards, Europe’s biggest shipyard, thereby securing full management control and bringing the South Korean group closer to being the world’s leading shipbuilder.

STX, which was bound under Norwegian law to make a full bid for Aker Yards after it passed a 40 % ownership threshold in June, has raised its stake in the group to 88.4 % by acquiring an additional 48 % for 660 billion won ($632 million, 428 million euros).

The South Korean company will thus pay 63 Norwegian kroner (11.66 dollars, 7.92 euros) for each Aker Yards share, valuing the entire company at 6.84 billion kroner ($1.27 billion, 860 million euros). “We have fully secured management control of Aker,” according to a group spokesman, adding the transaction would be completed on August 29. “It will help STX make inroads into cruise line construction,” he said.

The spokesman said Aker Yards would be renamed STX Europa at a shareholders’ meeting in early September. “We will make Aker in Norway into a specialised offshore vessel manufacturing base while its yard in France will specialise in cruise ships and defence business.”

STX, which ranks among the world’s five top ship builders, has also been eagerly eying its compatriot Daewoo Shipbuilding and has said it intends to become the world leader in the sector. The buy-out of Aker Yards, the world’s leading ferry and cruise ship maker, will give the South Korean group access to a lucrative market that today is firmly in European hands.

Trade unions, especially in France, have expressed fears that increasingly powerful Asian shipbuilders will push the traditional European industry leaders out of the business altogether, as happened previously with tankers. “There is a risk that our know-how will be pillaged and, as a consequence, jobs will be lost both inside the group and among subcontractors,” said the French CGT union that represents workers at the Norwegian group’s subsidiary Aker Yards France, in a statement on Monday.

Aker Yards said earlier this month that the offer underrates its potential, and analysts had pointed out that the 63-kroner-a-share offer was stingy compared to the 97 kroner STX paid per share for the first 40 percent of the company. But when the Norwegian group presented devastating results for the third consecutive quarter on 8 August, posting a second quarter net loss of 16.9 billion euros, a temporary slowdown in cruise-liner construction and downgrading its profit margins for the full year, the board grudgingly agreed to accept the offer.

By gaining control of Aker Yards, STX also clears away any remaining doubts about a deal it clinched with Paris at the beginning of June concerning Aker Yards France, formerly known as Chantiers de l’Atlantique, apparently without informing the parent company first. The deal was to sell the French state a 9.0 % stake in Aker Yards France, which is 75 % owned by Aker Yards. Added to the 25% currently owned by French industrial giant Alstom, French interests would then amount to 34%.