New York-listed transportation company Overseas Shipholding Group has reached an agreement to be acquired by Saltchuk Resources in a deal worth $950 million.

Privately owned family Saltchuk – with freight transportation, marine service, and energy distribution companies – entered into a definitive merger agreement to acquire OSG in a transaction that values the company at an aggregate equity value of approximately $653m and a total transaction value of $950m.

OSG said the deal has received unanimous approval from the boards of both companies, whilst the transaction will be funded through a combination of committed debt financing and cash on hand.

Under the deal’s terms, Saltchuk will commence a tender offer to acquire all outstanding shares of OSG it does not already own for $8.50 per share in cash.

The purchase price represents a 61% premium to OSG’s 30-day volume-weighted average price on January 26, 2024, the last day of trading before Saltchuk disclosed its non-binding indication of interest, as well as a 44% premium to the January 26 closing price of OSG’s shares and a 36% premium to Saltchuk’s initial indicative price of $6.25 per share.

OSG, a provider of liquid bulk transportation services in the energy industry for crude oil and petroleum products primarily in the U.S. Flag markets, will operate as a standalone business unit within Saltchuk, becoming a member of its family of diversified freight transportation, marine service, and energy distribution companies.

The closing of the tender offer will be subject to customary closing conditions, including the expiration of the Hart-Scott-Rodino Act waiting period and the tender of shares representing, together with the shares already owned by Saltchuk, at least a majority of OSG’s outstanding shares of Class A common stock, and is expected to close in the next few months.

Promptly following the successful completion of the tender offer, Saltchuk will acquire all remaining OSG shares not purchased in the tender offer through a second-step merger at the same price.

Sam Norton, OSG’s president and chief executive, said: “We are excited to enter into this new chapter together with Saltchuk, which has been a significant shareholder of OSG over the past several years and has a close understanding of our business.

“Saltchuk’s operating companies have distinguished themselves in their respective segments, and this transaction partners us with an organization that shares our values and focus on customers. We are thrilled to soon join the Saltchuk family of companies.”

Mark Tabbutt, chairman of Saltchuk Resources, noted: “OSG, our nation’s leading domestic marine transporter of energy, has a strong cultural fit with Saltchuk and shares our commitment to operational safety, reliability, and environmental stewardship. On behalf of the Saltchuk organization, we look forward to welcoming more than 1,000 members of the OSG team to our family of companies and growing the enterprise through multi-generational investments.”