Star Bulk to acquire Eagle Bulk and become largest bulk player

Eagle Bulk Shipping is one of the world’s largest owner-operators within the midsize dry bulk vessel segment and both companies are listed on the New York Stock Exchange. The all-stock merger will see a combined company led by Star Bulk chief executive Petros Pappas, boasting a fleet of 169 bulkers and a market capitalisation of around US$2.1Bn.

Under the terms of the agreement, Eagle Bulk shareholders will receive 2.6211 shares of Star Bulk common stock for each share of Eagle Bulk common stock owned. This represents a total consideration of approximately US$52.60 per share, a 17% premium based on Eagle Bulk Shipping’s closing share price of US$44.85 on 8 December. 

Upon the close of the transaction, Star Bulk and Eagle Bulk Shipping shareholders will own approximately 71% and 29% of the combined company, which will trade under Star Bulk Carriers Corp.

Mr Pappas commented, “Together, we will benefit from greater scale with 169 owned vessels, generating meaningful synergies and building an even stronger financial profile. We will leverage both companies’ technical and commercial fleet management capabilities to optimise performance, deliver on our health, safety, and environmental objectives and maximise earnings potential.” 

97% of the combined fleet of 169 owned vessels are already fitted with scrubbers. The fleet ranges from Newcastlemax and Capesizes to Supramax and Ultramax vessels with a global market presence.

Star Bulk Carriers Corp is expected to have combined liquidity of nearly US$420M, as of 30 September, and net leverage of approximately 37%. The transaction is expected to generate at least US$50M in annual cost and revenue synergies within 12-18 months. 

The current management team of Star Bulk will lead the newly merged company. In addition to Mr Pappas, Star Bulk chairman Spyros Capralos will serve as chairman of the combined company’s board. One member of the Eagle Bulk Shipping board will join the Star Bulk board at closing.

Star Bulk Carriers will be headquartered in Athens, Greece, maintaining offices in Stamford, Connecticut; Singapore; Copenhagen; and Limassol.

Eagle Bulk Shipping chief executive Gary Vogel said, “We are very excited to be joining forces with Star Bulk, uniting two best-in-class companies, both commercially and operationally. We are bringing together two highly complementary organisations and are confident this accretive merger with Star Bulk will unlock significant value for Eagle shareholders, including the opportunity to participate in the long-term upside of the combined company.”

The transaction is expected to close in the first half of 2024, subject to approval by Eagle Bulk’s shareholders, receipt of applicable regulatory approvals and other closing conditions.

Both companies expect to maintain their respective dividend policies until the transaction is completed. Following close, the combined company will maintain Star Bulk’s current dividend policy.