Together, Tallink and Silja would create the leading shipping company in the Baltic Sea area |
FINLAND/ESTONIA. The Tallink Group has reached an agreement with Sea Containers Ltd to buy the stock of Silja Line for €450 million and five million Tallink shares.
Tallink Board Chairman Enn Pant said that Tallink and Silja would together create the leading shipping company in the Baltic Sea area.
“Tallink’s bold and successful growth strategy is boosted by Silja Line’s long history, valuable brand and outstanding professionals. This transaction is firmly founded in our conviction that clients, employees as well as shareholders will benefit from the integration of these two shipping companies.”
Tallink’s strength lies in routes between Estonia and Finland, Estonia and Sweden and Latvia and Sweden. Silja has a leading position between Finland and Sweden.
The integrated company will be the leader in the cruise and passenger travel market on routes between Estonia, Finland, Germany, Latvia and Sweden and an important player in cargo transportation on the Baltic Sea.
Tax-free shopping onboard Silja. The merger would boost Silja’s duty free revenues |
Silja Line CEO Antti Pankakoski said: “We will now be able to actively develop our business and brand and be able to offer access to the entire Baltic Sea for all of our customers. As part of a dynamic and expansive group we will be in a good position to also offer our marketing expertise and knowledge gained from servicing the Finnish and Swedish routes and from marketing the services on the continental and international markets.”
Travel onboard Tallink, Superfast and Silja ferries will continue as usual. There are no changes planned in schedules or routes. The vessels will sail under their current flags.
The transaction will not include the SuperSeaCat fast ferry services between Helsinki and Tallinn, which will continue to be operated by Sea Containers.
Silja has struggled to replace the portion of duty free sales lost through intra-EU duty free abolition. Retail revenue has been hit by a drop in revenue from the key spirits sector in particular.
Inflight Service operates a purchasing pool that serves both ferry companies with travel retail goods.
Tallink operates 15 vessels in the Baltic Sea region. The company carried 3.2 million passengers in the financial year ending August 2005; its total revenue was €260 million and it employed 2,632 people. The company is listed on the Tallinn Stock Exchange.
Silja, including SeaWind Line, operates six vessels between Finland and Sweden. The passenger volume on these routes was 3.4 million last year. The revenue of the business now being sold to Tallink was €380 million (pro forma) in 2005. The number of employees was 2,740 last year.