ANTWERP, BELGIUM: Frontline Ltd. (NYSE: FRO ) and Euronav NV (NYSE: EURN ) have entered into a definitive Combination Agreement for a stock-for-stock combination based on an exchange ratio of 1.45 Frontline-shares for every 1.0 Euronav-share.

The agreement memorialises the principal aspects of the previously announced term sheet that was signed on 7 April 2022.

The combined group will create a leading global independent oil tanker owner and operator with the management, capabilities, resources and scale to successfully capitalise on the opportunities presented by the new era in the sustainable shipping industry.

With its complementary platforms, financial strength and skills, the combined group will be particularly well placed to provide innovative, clean and sustainable oil shipping solutions in a highly competitive environment. The combination of the two organizations will create a single best-in-class, highly competent and experienced team.

The enlarged fleet will enable the combined group to provide better service to customers on a global basis. Additionally, and in view of rapid technological changes, including digitalisation and new “low carbon fuels” adoption, the combined group will be able to mobilise more resources and achieve meaningful scale to meet these challenges and opportunities from the energy transition.

Commenting on the transaction, Mr. John Fredriksen said: “This transaction creates a clear market leader in the tanker market and will position the combined group for continued, sustainable shareholder value creation and the realisation of significant synergies. Frontline, with a fleet of 146 vessels, will be able to offer value enhancing services for our customers and increase fleet utilisation and revenues which will benefit all stakeholders. I am very excited and give my full support and commitment to this combined platform.”

Mr. Hugo de Stoop, CEO of Euronav said: “The proposed Combination is a huge opportunity to take a leading position in the tanker industry as we seek to master the transition to a world of clean, safe and sustainable shipping. This transaction represents a unique opportunity to deliver substantially better service to our customers, enhanced returns to our shareholders, and to provide a unique platform where people can fully express their talents while advancing our ambitious sustainability strategy towards decarbonisation of the shipping industry.”

Mr. Lars H. Barstad, CEO of Frontline said: “Frontline believes this transaction will form a powerful combination at an exciting point in the cycle. We are amalgamating a strong operational, technical and commercial platform to enhance shareholder value.”

Combination Structure

The proposed Combination is structured as a voluntary conditional exchange offer by Frontline for all outstanding shares of Euronav at an exchange ratio of 1.45 Frontline shares for 1.0 Euronav share, possibly followed by a (simplified) squeeze out, with the aim to then propose a merger of Euronav into Frontline to Frontline’s and Euronav’s shareholders as soon as possible thereafter (the “Merger”). Based on Frontline share price USD 8.34 per share (as of US close 8 July 2022), the proposed exchange rate represents a value of USD 12.09 per Euronav share.

The combined group will be named Frontline, incorporated and headquartered in Cyprus and will in addition continue to operate from various offices in Europe and Asia including Belgium, Norway, UK, Singapore and Greece. The combined group will be listed on Euronext Brussels, OSE and NYSE upon

Strategic Benefits of the Combination

• The combination will create a leading independent large crude tanker operator with an anticipated market capitalisation of more than USD 4 billion based on market values of the respective companies as of 8 July 2022, adjusted for the shares in Euronav currently held by Frontline.
• The combined Net Revenue and EBITDA for the two companies in 2021 was approximately USD 668 million and USD 246 million, respectively.
• The combined group will benefit from a balanced global vessel footprint with highly complementary platforms including 146 vessels consisting of 68 VLCC, 56 Suezmaxes, 20 LR2/Aframax and 2 FSO vessels. The best-in-class combined expertise of these businesses, supported by a strong balance sheet and access to attractive financing will support industry leading operational break-even levels for the combined fleet.

Value Creation & Synergies

• The Combination is anticipated to deliver significant synergies of a minimum of USD 60 million on an annualised basis, including savings in selling, general and administrative expenses and other expenses resulting from (among other things):
• A larger fleet allowing for a better utilisation through, for example, use of combination voyages
• Economies of scale driven by cost synergies in respect of daily operational expenditures, dry-dock, and special project expenses
• Financial savings, primarily owing to a larger and stronger balance sheet improving the cost of debt

The Frontline Board and Euronav Supervisory Board strongly believe the combined group will represent a premier and well-capitalised company through which investors can participate in the tanker market, benefiting from tangible economies of scale via pooling arrangements, procurement opportunities, reduced overhead and enhanced access to capital, as well as a highly liquid stock.

Senior Leadership and Governance

The combined group will be headed by Mr. Hugo De Stoop as Chief Executive Officer. Hugo De Stoop has a strong track record of sustainable value creation. His experience will support the speed of execution of the Combination, allowing the combined group to manoeuvre with efficiency in a tanker industry undergoing rapid and fundamental changes.

The combined group will benefit from an efficient governance structure designed to promote effective performance, with a one-tier Board limited to seven directors, the majority of whom, including the Chair, will be independent.

Upon completion of a legal merger or as soon as Frontline holds 75% or more of Euronav’s outstanding shares (excluding treasury shares held by Euronav), three of the current independent directors of Euronav will be appointed to the combined group’s board.

Creating a Leader in Sustainable Shipping

The combined group will create a leader in sustainable shipping, aiming for the highest Environmental Social and Governance (“ESG”) standards in the industry.

This will provide a platform for extending Euronav and Frontline’s leading positions in sustainable shipping and will allow the combined group to further advance industry best-in-class sustainability practices and strategy. Both entities have set ambitious decarbonisation targets that will be further enhanced through this combination.

Moreover, the combined group will benefit from an ESG committee composed of executive and board representatives. This committee will allow for proper oversight of the combined group’s sustainability strategy.