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Published: 1 August 2011
GE SeaCo sale agreed
As speculated in WorldCargo News Online last week, China’s HNA Group Company Ltd (HNA) and Bravia Capital of Hong Kong have agreed to acquire GE SeaCo, subject to customary regulatory and shareholder approvals, for US$1.0487B.
The transaction contemplates the acquisition by HNA of the 50:50 joint venture between GE Capital and SeaCo Ltd as well as certain owned container assets of SeaCo Ltd and GE (ex-Genstar), which are currently managed by GE SeaCo.
Of the equity purchase price, GE will receive approximately US$500M for its interest in the joint venture and its owned container fleet, while SeaCo Ltd will receive approximately US$528M for its interest in the joint venture and its owned container fleet.
GE SeaCo, the world’s fifth largest container lessor with a diversified fleet of around 900,000 TEU, was formed in 1998 as a joint venture between General Electric Capital Corporation and Sea Containers Ltd (subsequently replaced by SeaCo Ltd). The company is registered in Barbados, with 13 operating, sales and support offices worldwide and representatives in more than 80 countries. Its head office is in Singapore.
After completion, GE SeaCo will operate as a core business within HNA's existing logistics and finance businesses. GE SeaCo's key managers will remain with the company and the new owner intends to increase the size of GE SeaCo significantly over the 18 to 24 months following the acquisition, HNA said in a statement.
"This acquisition fits precisely into HNA's strategic plans to quickly grow our logistics and transport business," said Adam Tan, executive director of HNA. "Our company currently owns and operates China's fourth largest port, a fleet of 30 containerships and a container ship finance arm. GE SeaCo fills an important gap critical to our ongoing growth. We believe this is a tremendous opportunity for HNA to acquire one of General Electric's world class businesses."
Bharat Bhise, CEO of Bravia Capital said, "This is an exciting acquisition that comes at a time when the global growth in marine container demand continues to grow on a long-term basis. Our investment in GE SeaCo is the latest of several successful shipping and aviation acquisitions over the past 18 months, and reinforces our position as a leader in transportation and logistics investments worldwide. GE SeaCo will be at the forefront of this growth."
The acquisition is being funded by a combination of equity and debt. HNA and Bravia have arranged a committed debt facility through Deutsche Bank and ING. Deutsche Bank Securities Inc served as sole M&A advisor to the sellers in this transaction.
"It is an honour for the company to become part of HNA as it continues its strategic growth in transport and logistics,” said GE SeaCo Chairman and acting CEO David Amble, a GE executive who will continue as CEO for the company. “The GE SeaCo team has been impressed by HNA's commitment and vision. This transaction is an attractive one not only for the sellers, but also GE SeaCo management and our customers."