On 7 November 2016, Zeeland Seaports (the Netherlands) and Port of Ghent (Flanders, Belgium) said that they were exploring a possible merger. The two port authorities now jointly present a balanced merger agreement to their shareholders and works councils.
Over the next three months, shareholders and works councils are to give their verdict on the merger.
Based on Equality
The agreement is to achieve a merger on an equal basis (50%-50%) and thus create a single cross-border port area and a new unified port authority. The joint merged entity will have a value in shares of around € 1 billion.
Based on the principle of equality, after the merger the shares will be divided as follows: Zeeland province 25%, Borsele 8.33%, Terneuzen 8.33%, Vlissingen 8.33%, Ghent 48.52%, Evergem 0.03%, Zelzate 0.005%, East Flanders province 1.444%.
European Company
The cross-border merged port is to take the form of a European company as a holding company for the two existing port authorities. The aim of this is to underline the new company’s international character and to ensure that the legal status of neither country will prevail.
The two companies will exchange their own shares for those of the European company. In this way, the port authorities will retain their own assets (land, buildings and infrastructure) as subsidiaries of this European company. The subsidiaries will also remain responsible for public tasks such as the maintenance of roads in the port area, directing nautical traffic and safety in the port.
76% Majority for Important Decisions
It is proposed that all important decisions by the shareholders will require a 76% majority. The major shareholders on both sides of the border (Zeeland province and the city of Ghent) will also retain a de facto right of veto.
Job Security
The basic principle is that staff will remain employed by the subsidiaries of the holding company, Port of Ghent and Zeeland Seaports, and will have job security. There will be no redundancies as a result of the merger. The current employment conditions will also remain in force.
Taxes in Both Countries
The corporate headquarters of the European company will be in the Netherlands. The European company will also have an office in the future port authority building on Graslei in Ghent. Since both port authorities legally continue to exist, each port authority will pay tax in its own country.
Unified Governance
The two current CEOs will together head up the new company. The European company and the two subsidiaries will have unified governance and management. A new supervisory body of limited size with four Dutch and four Flemish representatives will replace the existing supervisory board of Zeeland Seaports and the executive board of the Port of Ghent. The supervisory body will consist of at least four independent members (non-active politicians).
The retain direct contacts with its public shareholders, there will be a shareholders' committee with all the representatives of the municipal, provincial and other councils. In addition, there will be ongoing and bilateral consultations with the shareholders.
Leading Position in Europe
The new port will immediately assume a leading position within Europe: it will be the number 3 in terms of added value and number 10 in terms of goods transhipment by maritime shipping. This is to help increase the brand familiarity of the port region and of the companies. By 2022, the merged company aims to be a leading brand in order to attract investors.
Sustained Growth
The business plan is focused on sustained growth. The merged company is seeking to increase added value by 10% by 2022. It wants to grow transhipment by maritime shipping from 62 million tons today to 70 million tons. The target for transhipment to/from inland navigation is 60 million tonnes (currently 55 million tonnes).
As a result of the growth in added value, volume and turnover, it is expected that employment in the new port zone will increase to 100,000 jobs by 2022 (direct and indirect; currently 95,000).
Efficient and Economy of Scale
The merger offers opportunities to cut operational costs – as a result of efficiency, economies of scale and the avoidance of overlapping activities. These savings will result in a more competitive port authority, with the benefits also accruing to firms as a result of lower rates or slower increases in rates. In addition, the increased scale will result in more opportunities for combining cargo flows.
The scale of the merged company will also lead to increased specialisation of employees and thus more specialised services for the firms in the port area. By maintaining offices at various locations and establishing a business advisory board, the 'short lines of communication' so prized by firms will be guaranteed.
New Name
Following the approval of the merger agreement by the eight municipal and provincial authorities, the new name of the unified cross-border port area and the merged company will be announced. This is provisionally planned for Friday 8 December.
Picture: The Ghent–Terneuzen Canal.
