Canadian shipbuilding group Davie announced it has finalized its acquisition of Finland’s Helsinki Shipyard Oy, which has struggled to gain new business due to Western sanctions against Russia.
The deal has been nearly a year in the making, starting from December 2022. By March 2023, Davie exercised an exclusive option to purchase the assets of Helsinki Shipyard. In April a business purchase agreement was signed, and on July 4 Davie secured a new 50-year land lease from the city of Helsinki.
Financial terms of agreement were not disclosed, but Davie said the transaction is supported by a combination of its own funds and €77 million ($110 million) of financing from the Québec government, including an equity investment of €30 million ($43 million) and a loan of €47 million ($67 million).
“A significant proportion of the funds will go to ensuring the shipyard has working capital while it gets up and running and secures new business,” David said in a statement announcing the transaction.
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“We are delighted to bring two historic and highly complementary businesses together. It would not have been possible without the support of Québec, the City of Helsinki, Finland and Canada,” said James Davies, Davie president, CEO and co-owner. “We are confident our talented people and world-class supply chain will quickly form the preeminent global center of excellence for green Arctic shipbuilding, and other specialized products. Empowered by Helsinki shipyard’s unique know-how, Québec can also more efficiently deliver Canada’s polar icebreaker order book, which is the western world’s largest.”
Alex Vicefield, chairman and CEO and co-owner of Davie’s parent company Inocea, said, “Linking together the capabilities, capacity and expertise of the two global leaders in ice-class vessel and icebreaker construction is a strategically important development for the western world. The Arctic is critical for future security, trade, navigation and the environment and Inocea is proud to be at the forefront of this next frontier.”
“Importantly, the Canadian government has looked favorably on the potential synergies resulting from the transaction for the construction of icebreakers under the National Shipbuilding Strategy,” Davie said.
Davie builds and maintains icebreakers, warships and ferries for both government and commercial customers. Helsinki Shipyard currently builds small and mid-size cruise ships, though the yard has also built other vessels types, including warships and a large number of icebreakers under previous owners.
Pierre Fitzgibbon, Québec Minister of Economy, Innovation and Energy, said, “The collaboration established through this acquisition will benefit both the Davie Group and its multiple suppliers throughout Quebec. As a result, the Davie Group is well positioned to secure contracts around the world. This is a win-win transaction for both sides of the ocean.”
Jean-Yves Duclos, Canada Minister of Public Services and Procurement, said, “It is with great pride that we see Davie acquire a world-class shipbuilding jewel, boosting the efficiency of icebreaker and ferry construction as part of the National Shipbuilding Strategy. This acquisition will bring a clear advantage in terms of supply chain cost management through increased purchasing power, while maximizing the long-term economic impact for Canada and the greater Québec City region. Finally, the transaction will also open up new international markets for the local supply chain. This is yet another step towards making the Québec City region a world-class maritime hub.”
Helsinki Shipyard has undergone a number of ownership changes over its long history and was most recently owned by Cyprus-based Algador Holdings, set up by Russian businessmen Rishat Bagautdinov and Vladimir Kasyanenko.
The yard has struggled to win new orders after its business with Russia became frozen due to Western sanctions over the war on Ukraine.
“This is the best possible news for Helsinki shipyard, our talented workforce and our supply chain,” Kim Salmi, managing director, Helsinki Shipyard. “After months of planning, our top priority is to rapidly return this business to what it does best – designing and building world-class ships quickly, efficiently and cost effectively.”
Wille Rydman, Finland Minister of Economic Affairs, said, “Thanks to the new owner, the future of the shipyard and the entire Finnish marine industry looks brighter. It is also very positive for the Finnish state that the change of ownership took place on market terms.”
Juhana Vartiainen, Mayor of Helsinki, said, “We have gained a strong, stable and competent operator from a reputable country for our shipyard operations. Versatile and vibrant business activity enables the success of Helsinki and enhances the well-being of our people. This is very welcome and happy news for all Helsinki residents.”
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The Canadian and Finnish shipyards will be separate legal and operating entities, while the business headquarters will remain in Québec.