The creation of a new major player in the market for wind installation vessels with the merger of Cadeler and Eneti materialized on the initiative of the former company, headed by CEO Mikkel Gleerup.

Gleerup says as much following the announcement of the merger set to create a major player within installation of offshore wind turbines. The combined company could come to represent almost a fourth of the global market.

As such, a sweeping consolidation in the sector could have begun as well where both the size of the turbines that need to be installed at sea and of the companies that provide services in relation thereto is becoming an increasingly important factor.

”Size has a positive effect. It allows for ramping up the pace of projects and deploy the right ship for the specific project in question. So there is a lot to gain for customers in all this,” Gleerup tells ShippingWatch.

He will become CEO of the combined company that will keep the name Cadeler and have its headquarters in Copenhagen.

The merger of the two companies will create the industry’s largest fleet of wind turbine installation vessels (WTIVs).

When all newbuilds have been delivered, the combined company will have an armada of ten vessels for installation of turbines and foundations.

The new company will ultimately come to represent 22 percent of the market for WTIVs.

According to Gleerup, this represents an apt scale in this current situation, meaning there are no plans to grow further – neither in the shape of inviting others into the merged company nor from ordering more ships.

”There are no such plans at the moment, and following the merger, I believe we have the perfect size. But of course we follow the market closely all the time,” says the CEO, whose new company carries a market value of EUR 1.2bn.

Several large deals

At the same time, Eneti can provide access to both the Asian and US market, allowing the new Cadeler to have a more global profile compared to the one up until now that has focused primarily on Europe.

Cadeler has recently landed several significant deals.

Less than a month ago, the company signed two contracts with utility Ørsted regarding the major offshore wind farm Hornsea 3.

The total value of these deals was at EUR 500-700m.

And the prospects of a booming offshore wind market with new and more complex customer demands was the reason why Cadeler approached the Monaco-based rival, a bulk carrier no more than two years ago.

Gleerup’s own market expectation is a 30-percent annual growth, and he does not recognize the market slowdown pointed to by other industry stakeholders.

“We will become a stronger company combined. We are servicing some major companies and we carry out major, complicated tasks for those companies. And that is why being a stronger company and a bigger company is an asset,” he says.

EUR 100m gain

The projected annual synergy gain amounts to some EUR 100m, of which EUR 50m come from improved fleet utilization, Gleerup explains.

Aside from bidding a farewell to Eneti’s top management, including spearhead Robert Bugbee, no further staff cuts are on the docket, he says.

Instead, it is a matter of retaining and securing the right expertise, says the chief exec who will become the absolute pinnacle figure of the new company.

The merger agreement has been greenlit by the boards of both Cadeler and Eneti and now needs the rubber stamp from shareholders and regulators alike.

Who stands to gain the most from this merger? The customers, the shareholders or the employees?

“I believe everyone benefits from the merger,” concludes Mikkel Gleerup.

English edit: Kristoffer Grønbæk & Simon Øst Vejbæk