OSLO, Feb. 28�The seesaw battle between rival Norwegian offshore contractors Aker Maritime AS and Kværner AS tilted anew Wednesday, with Aker proposing to merge together its main business units with Kværner's Oil & Gas division to create a "future oriented" sector technology company with international ambitions.
Kværner, however, rejected the Aker scheme out of hand, saying it saw "no substantially new elements" in the proposal.
Under the Aker plan for what it called a "Future Kværner-Aker," Kværner, Aker Maritime, and the Aker RGI-owned shipyards group Aker Yards would be amalgamated.
This tie-up, said Aker�which is Kværner's leading shareholder with 17.8%�would pave the way for new investment and growth in the combine's core areas, and "the possibility of added values for the shareholders without the injection of fresh equity capital."
The hypothetical merged company, Aker said, would balance "a sound base in its domestic markets and with a major international potential," and have turnover of 19-20 billion kroner in 2001, growing "organically" to nearly 30 billion kroner the year after.
Another feature would be the amalgamation of Aker Yards and Kværner Shipyards, forging a Norwegian-based shipyards group with highly specialized yards in Finland, Germany, Norway, and the US. The shipyard group would be owned by Kværner and Aker RGI to start, with the latter as majority shareholder.
Aker said net cost and market synergies achieved through its plan were calculated at between 550-600 million kroner within Oil & Gas, and 250-400 million kroner within the shipyards unit.
Kværner's Engineering & Construction unit, under the Aker proposal, would remain one of two independent and specialized core areas in Kværner outside of the Oil & Gas division, but "certain smaller sections" of the division would be transferred to the oil and gas technology company.
Kværner said it had "on a number of previous occasions" presented its own strategy to develop its oil and gas activities by "broaden(ing) its sphere into international markets and technology areas (through a merger with Aker), especially in areas such as subsea and deepwater production."
Merging with Aker, said Kværner, would "not provide sufficient strength to meet these challenges," adding that it felt the potential synergies claimed by Aker in today's proposal were "overestimated."
The company did extend an olive branch on the possible tie-up of the two contractors' shipbuilding businesses, saying it had "on several occasions, invited Aker to participate in such a dialogue," and was "prepared to start such discussions." Kværner emphasized, however, that it did "not anticipate synergy gains at the level indicated by Aker through a combined activity."
In August, Kvaerner made a hostile play for Aker with an all-shares bid through which the latter's shareholders would receive 0.79 of one Kværner share for each Aker share held. Aker's board of directors succeeded in persuading company shareholders to reject the offer on the grounds that it undervalued Aker.
Aker partly countered its arch rival's bid in December by opting to take a 17.8% stake in Kværner, a percentage reduced from its original 26.7% target after the European Commission said it would investigate the Norwegian contractor's buy-in plans to ensure they weren't anticompetitive.
