Teekay Buys Navion for $800M

Teekay Shipping Corporation announced that it will buy Statoil's wholly-owned shipping company, Navion ASA, on a debt free basis, for approximately $ 800 million in cash. The transaction positions Teekay as a strategic logistics provider of shuttle tanker services to Statoil and other oil companies, and increases Teekay's presence in the conventional crude oil and product tanker trades. In 2001, Navion transported a total of 160 million tons of crude oil and petroleum products, exceeding the 135 million tons carried by Teekay in that year. Operating from Stavanger, Norway, Navion has built a leading franchise in the complex North Sea offshore loading business. It provides logistics services to Statoil and other oil companies through a portfolio of fixed-rate long-term contracts of affreightment (COAs). Navion supports this COA business with a modern fleet of 9 owned and 17 in-chartered shuttle tankers, including four vessels from Ugland Nordic Shipping AS (UNS), Teekay's shuttle tanker subsidiary located in Sandefjord, Norway. Navion also services the conventional tanker requirements of Statoil and other customers through a modern in-chartered fleet of 12 crude oil tankers and 9 product tankers mainly operating in the Atlantic region. In addition Navion owns 2 FSO vessels currently trading as conventional crude tankers in the Atlantic region, and 1 gas carrier on long-term charter to Statoil. Through Navion Chartering, an entity owned jointly with Statoil, Navion has the right of first refusal on Statoil's oil transportation requirements at the prevailing market rate. "It is an exciting breakthrough for Teekay to be chosen as the global shipping and logistics provider to Statoil," said Bjorn Moller, President and CEO of Teekay. "There is a great fit between Statoil and Teekay, both in terms of operating philosophy and growth ambitions. Navion complements Teekay's existing business and enables us to expand our service offering to our global customer base, for example, through Navion's broader involvement in the product tanker trades." "We are very pleased to have entered into this sales agreement with Teekay", said Erling 0verland, Executive Vice President of Statoil and Chairman of Navion. "We selected Teekay due to its proven record of safety, service and quality, its global reach and its financial strength. I am confident that Navion will continue to deliver first class service to Statoil and its other customers. Under Teekay, Navion will also be better positioned to provide transportation support for Statoil's growing international oil activity." The effective date of this transaction will be January 1, 2003 and the closing is expected to occur in the second quarter of 2003. Following the closing, Stavanger will become Teekay's main operating office in Norway. At that time, Peter Antturi, currently Teekay's Senior Vice President and Chief Financial Officer, will assume the role of President of Navion. Mr. Antturi will continue his duties as CFO until a successor is appointed. DnB Markets served as financial advisors to Teekay.