BV improves GL offer

Bureau Veritas (BV) is preparing an improved offer for presentation later this week to the shareholders of Germanischer Lloyd (GL), as it pushes ahead with its plan to combine the strengths of the two societies to create a new global leader in ship classification, based in Hamburg.

The original BV share acquisition offer was presented to GL shareholders on November 9, since which time other potential investors have reportedly declared an intention to acquire an interest in the Hamburg-headquartered classification society. But BV is confident that the revised terms of its new offer will be attractive to GL shareholders, while creating a long-term global market leader in maritime classification in Hamburg.

BV ceo Frank Piedeli?vre says, “We believe the prospects of obtaining the approval of Germanischer Lloyd shareholders are favourable. We have submitted what we consider to be the best solution for shareholders, in every respect. In our opinion, none of the competing bidders is in a position to make a comparable bid on either a strategic or an operative level.”

“The alliance which we envisage would create value from the very start. Bureau Veritas and Germanischer Lloyd complement each other ideally and, by joining forces, can assume the number one position in ship classification worldwide. No other potential grouping can provide such convincing answers to the challenges facing the classification sector in general, and Germanischer Lloyd in particular.”

Piedeli?vre also maintains that only the offer submitted by BV will provide Hamburg with the global leader in maritime classification that its status as a city and an international business location merits. He says, “Hamburg will be the world headquarters of the proposed alliance. There is no doubt about that. All major decisions regarding marine activities will be made in Hamburg. The maritime divisions of both companies complement each other perfectly. And the alliance will provide a vital incentive to create new jobs, so fears about job losses are completely unwarranted.”

Piedeli?vre admits that BV was not surprised to hear of the interest expressed by other parties in acquiring a shareholding in GL. “After all,” he says, “Germanischer Lloyd is a highly attractive company of international repute.”

BV has written to the GL shareholders during the past week informing them that the offer submitted on November 9 is currently under review. Piedeli?vre says, “We are confident that our revised bid will answer any doubts that the shareholders may have, because we are currently revising some essential elements of our offer.”

BV will announce its revised offer in time for the GL shareholders’ meeting scheduled for December 18 in Hamburg. Says Piedeli?vre, “We expect the shareholders to take charge of the matter, and to elect a spokesperson with whom we can conduct direct negotiations.” BV will also offer GL’s management and staff representatives the opportunity for direct talks.

BV is currently analysing information on potential rival offers. According to media reports, a private investor in Hamburg wants to acquire up to 100% of GL. But Piedeli?vre says, “Although Germanischer Lloyd is clearly an attractive target for a financial investor, a purely financial bid will not improve ? and may indeed hinder ? the development prospects of Germanischer Lloyd, especially if the potential investor has neither the necessary industry experience and competence nor a strategic, well thought-out growth model. A deal of this kind has to be planned thoroughly on a long-term basis.”

Piedeli?vre adds, “One thing is now clear. Without a strategic partner, GL will remain in fifth place in the global market for ship classification. Collectively, the four largest classification societies have a market share in excess of 70%. In view of the serious challenges facing the industry, in particular the demand for services and expertise created by the rapid growth of markets in Asia, there has never been a better time for the alliance which we are proposing. If it doesn?t happen, there is a real danger of missing the boat.”

GL is operating successfully at the moment, but industry experts have warned about the consequences of an anticipated slowdown in containership building. This would have a significant impact on GL, as something like 80% of its business is in the containership market. The proposed alliance would occupy a broader footing, and would not rely on any one single market sector for its success. There is very little overlap between the BV and GL portfolios.

Piedeli?vre concludes, “The marine divisions of both companies, managed from Hamburg, would collectively control an active fleet of more than 13,000 ships worldwide and would have a 26% in the global market in terms of classified ships. This would create a new number one in global ship classification, and that is where we believe that both BV and GL belong.”