Overseas Shipholding to Acquire Tanker Operator Maritrans

Overseas Shipholding Group Inc. (OSG) announced on Monday that it had agreed to acquire crude oil and petroleum tanker operator Maritrans Inc. The cash transaction, valued at around $455 million, will immediately position Overseas Shipholding as a dominant Jones Act ship operator. Tampa, FL-based Maritrans operates 11 articulated tug and barges (ATB) units, five product carriers and has three large ATB tug barges under construction. Beginning last year, Maritrans had embarked on a program to convert its existing fleet of 16 vessels from single hull to double hull to meet international mandates.

The acquisition will give OSG control over about one-third of the refined product trade in the coastwise U.S. markets and overnight, OSG doubles its fleet of U.S. Jones Act-protected vessels to 36 ships. The NY-based OSG already owns or leases a fleet of 88 ships, making it among the largest publicly traded tanker firms, both in terms of number of vessels and deadweight tonnage. OSG also maintains a notable presence in the Jones Act market on the East and West coasts.

The deal was quickly hailed by commercial shipping analysts as a good one, with niche petroleum carrier Maritrans in good position to add value and strategic benefits to OSG. Most observers think that Maritrans will provide OSG with stable and expanding earnings, while broadening OSG’s market penetration. Both companies approved the deal, which is expected to be completed by the end of the year. The acquisition will require Maritrans stockholder and regulatory approvals before that can happen.