Thursday, 10 January 2013

A blend of two giants… DNV and GL to merge.

Two of the largest of international classification societies- Norwegian Det Norske Veritas and German   Germanischer Lloyd (GL) have agreed to merge next year.  The new organisation will be called the DNV GL Group and have a turnover of EUR 2.5 billion. 

It will displace, with a combined tonnage of 265 million GRT of ships and rigs, Class NK as the biggest classification society in the world. The DNV Foundation will hold 63.5 % of the new entity with Mayfair Se holding 36.5 %; Mayfair is the owner of GL.  The new company will be headquartered in Norway with the maritime business unit situated in Germany. Other units will be headquartered, besides in Norway and Germany, in the Netherlands and in Italy.  The new entity will have a global network of offices and more than 17.000 employees.

“The merger rests on a strong strategic rationale, and responds to challenges of increased globalisation, rapid technological change and the need for sustainable development. Our customers will benefit from an increased service offering and global competence base as well as one of the densest networks,” says DNV’s Group CEO, Henrik O. Madsen, who will be the CEO of the new setup. 

GL Group CEO Erik van der Noordaa was also upbeat; “The merger with DNV supports our long-term goal of being recognised as one of the most respected technical assurance and advisory companies in the world”, he said.

The merger seems to make excellent strategic sense. DNV is well known for its knowhow in the offshore energy sector, from where it moved into aviation, energy, healthcare, food and beverage, IT and telecom, petrochemical and rail sectors. GL, on the other hand, is known for its expertise in the containership segment in particular and in the maritime sector in general, although it has a considerable presence in oil and gas sector; it bought London based offshore consultancy Noble Denton two years ago. GL has also built a stellar reputation in renewable energy consulting, including in the wind, solar, tidal and wave energy segments. 

The combined group, therefore, will have a strong synergised presence in diverse areas from the outset, including the maritime segment and across the entire oil & gas value chains, besides in renewable energy, pipeline verification, power, testing, certification and general advisory services. 

DNV and GL have explored the possibilities of cooperation earlier, in 1999/2000 and in 2006. Both companies seem pleased today at timing of the merger. Media sources say that the nuts and bolts of the merger may take up to six months to complete, as many issues have to be sorted out and approvals obtained. There is also the matter of DNV and GL both being independent advisors to the United Nations on maritime safety matters; they presently represent their respective countries there.


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