Aker ASA and Aker Horizons Announce Strategic Merger and Green Bond Redemption
Aker ASA and Aker Horizons Announce Strategic Merger and Green Bond Redemption
In a significant development in the world of sustainable business, Aker ASA and Aker Horizons ASA have revealed a merger that is poised to reshape their operational landscape. The merger, referred to as 'the Merger', is between Aker Horizons Holding AS, a subsidiary of Aker Horizons, and an indirect subsidiary of Aker ASA, known as AKH MergerCo. Under the agreement, shareholders of Aker Horizons—excluding Aker Capital—will receive a combination of cash and shares in Aker ASA as consideration for their stakes.
Merger Details
Specifically, for each share held in Aker Horizons, shareholders will receive 0.001898 shares in Aker ASA along with NOK 0.267963 in cash. This exchange ratio is calculated based on the volume-weighted average share prices of both Aker and Aker Horizons over the past 30 days. The completion of the merger is expected to take place in the third quarter of 2025, subject to several regulatory approvals and customary closure conditions.
As part of this strategic maneuver, Aker Horizons has decided to redeem its NOK 2.5 billion green bond ahead of schedule. The early repayment will utilize existing cash reserves and is projected to conclude by the end of May 2025, presenting a move to minimize variable interest expenses associated with the bond until its maturity.
Strategic Rationale
This merger emerges after a thorough strategic review by Aker Horizons' Board of Directors. The board has expressed confidence that this merger stands as the most appealing pathway for the future of Aker Horizons and its stakeholders. Given the persistent market uncertainties and substantial funding requirements to leverage the potential within Aker Horizons' asset portfolio, operating as a stand-alone entity presents significant challenges, particularly regarding capital acquisition without the risk of diluting shareholder value.
Aker Horizons has also been grappling with high levels of debt, due to mature obligations in the upcoming twelve months. The board believes that the merger will not only streamline operations but also enhance financial stability for AKH and its shareholders. After the merger, Aker ASA is set to further invest in the existing assets of AKH Holding, focusing on promising avenues such as renewable energy projects and potentially transforming data center businesses in Narvik.
Voices from Leadership
Øyvind Eriksen, President and CEO of Aker ASA, emphasized the merger as a proactive measure to address financial turbulence faced by Aker Horizons. He stated, "We believe in the underlying industrial potential and are taking decisive actions to safeguard and reconstruct shareholder value through more focused capital deployment and a clear strategic direction."
Independent Director Lone Fønss Schrøder remarked that the merger aligns with long-term stakeholder interests. She noted, "This transaction reflects the necessity to adapt to a drastically changed market where raising capital has become increasingly arduous."
Kristian Røkke, Chairman of Aker Horizons, added that the organization aims to harness industrial, technological, and capital market expertise to expedite progress toward net-zero emissions goals. He asserted that existing initiatives retain their promise, despite shifting market conditions that necessitate reassessment of large-scale green investments.
Future Prospects
The conclusion of this merger promises not only a new structural configuration but also a fresh strategic direction for Aker Horizons, as the board navigates the portfolio of assets post-merger completion. Key projects that could reshape the corporate narrative include engagement in offshore wind projects and the emerging AI factory initiative in Narvik, where rising demand for AI infrastructure aligns with potential revenue growth.
In summary, this merger represents a pivotal moment for both Aker ASA and Aker Horizons, combining resources and strategies to foster a more resilient business model in today's challenging economic climate. As shareholders prepare for the transformational period ahead, the focus will remain on driving innovation and sustainability within the energy and industrial sectors.