Tallink to become leading shipping company in Baltic Sea area

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After entering into an agreement with Sea Containers Ltd. to buy the Baltic ferry operator Silja Line for EUR 450 million and five million shares of Tallink Group, the Estonian ferry operator Tallink became the leading shipping company in the Baltic Sea area. Silja Line's traditional ferries operating between Finland and Sweden will complement Tallink's existing route network.
      The integrated company will be the leader of the cruise and passenger travel market on routes between Estonia, Finland, Germany, Latvia and Sweden, and will become an important player in cargo transport on the Baltic Sea.
     
Tallink's acquisition of Silja's core business includes six fully-crewed ships on two routes - Symphony and Serenade on the Stockholm-Helsinki run, and Europa, Festival, SeaWind, and SkyWind on Stockholm-Turku crossing - along with staff, facilities, and the renowned Silja brand.
      "We will now be able to actively develop our business and brand and be able to offer access to the entire Baltic Sea for all of our customers", notes Silja's Finnish CEO Antti Pankakoski.
      Pankakoski adds that despite the change of the ownership, Silja is to remain Silja, and Tallink will be Tallink also in the future. He will continue working for Silja and has been promised a seat on Tallink's Board of Directors.
     
Currently, all Silja Line vessels sail under the Finnish and Swedish flags, and Tallink is to continue operating the business under the Silja brand. Moreover, the ships are to continue sailing under their current flags and with their existing officers and crews. In its statement yesterday, Sea Containers said that Tallink is to ensure that Silja's existing obligations towards the employees, including pension obligations, are not adversely affected by the transaction.
     
According to Tallink, travel on board Tallink, Superfast, and Silja ferries will continue as usual. There are no changes planned in schedules or routes. All bookings are valid, client loyalty benefits will remain in effect, and customer service will continue as normal.
      Commenting on the sale, Enn Pant, the Chairman and CEO of Tallink, said that as a result of the acquisition, Tallink and Silja will together form the leading shipping company in the Baltic Sea area, which has been a vision of Tallink for years.
      Last year, Tallink carried 3.2 million passengers and Silja Line 3.4 million. The two companies posted net sales of EUR 260 million and EUR 380 million respectively, and between them they employ around 6,800 people.
     
The transaction does not include/ /the fast ferry services between Helsinki and Tallinn, nor the two SuperSeaCat fast ferries which operate on the route. They will continue to be operated by Sea Containers.
      Sea Containers also announced that the sale of Silja is subject to customary conditions including the receipt of regulatory approvals from the relevant competition authorities and corporate approval of Tallink's shareholders.
     
The news of the transaction came as a relief to the employees, as it ended the uncertainty that had been troubling the staff for a long time, predating the official announcement last year that the company was up for sale.
      However, the Finnish Seamen's Union will keep Tallink's personnel policy under careful observation, because after purchasing the Superfast Ferries vessels operating on the Rostock-Paldiski-Hanko route from a Greek-owned shipping company earlier this spring, Tallink dismissed all 300 of its multinational crews, replacing them with Estonians whose salaries were only 25 percent of what the multinational crew of the Superfast vessels had earned. The union launched a boycott against Tallink's Superfast Ferries vessels, ending it only after the company agreed to increase the salaries gradually to the Finnish level.


Previously in HS International Edition:
  Tallink buys Silja Line for EUR 450 million and stock (12.6.2006)
  Tallink replaces Finnish crew with low-paid Estonians (16.5.2006)

Links:
  Sea Containers news release 12.6.2006
  AS Tallink Grupp press release 12.6.2006

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