The merger of two shipping companies could be a sign that the recent trend of deglobalization has its limits.
Star Bulk Carriers
said late Monday that it will buy
Eagle Bulk Shipping,
with the combined entity valued at more than $2 billion. Star Bulk slipped in out-of-hours trading, while Eagle Bulk jumped more than 10% in the premarket.
The shipping sector has always been a bellwether for the health of the economy because the more products produced need distributing which is an early indicator of improving growth.
The merger is also a vote of confidence in the future of shipping after a rough few years. The Covid-19 pandemic brought global trade to a near standstill. A tepid economic recovery in China has weighed on the industry, but the country is now working hard to restock resources like iron ore and coal. Daily freight rates have quadrupled since the start of the year.
The marriage creates the fourth-biggest commodities carrier, one that is large enough to be attractive to a wider pool of investors such as mutual funds that normally aren’t interested in companies worth less than $1 billion. The deal was backed by Oaktree Capital Management, which had stakes in both firms, according to The Wall Street Journal.
Write to Brian Swint at [email protected]
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