Should I buy Euronav shares after the company announced a merger with Frontline?

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Euronav (STU: OCW) shares have advanced from €8.95 to €12.11 since March 30, 2022, and the current price stands at €11.62.

Last week, Euronav announced a $4.2 billion merger with Frontline that would create the world’s largest oil tanker fleet that would operate from Belgium, Norway, the U.K., Singapore, Greece, and the U.S.

Euronav announced a $4.2 billion merger with Frontline

Euronav is one of the largest independent crude oil tanker companies globally; the company’s fleet includes FSOs, a V-PLus, VLCCs, and Suezmax vessels.

Hugo De Stoop, CEO of Euronav, said that the 2022 year looks far more encouraging than last year, with different and more numerous factors at play and largely in Euronav’s favor.

The U.S. Energy Information Administration (EIA) reported that crude oil production would reach record levels in 2023, and the anticipated progression in the market recovery in both supply of oil and the demand for oil should continue to drive tanker markets going forward.

Euronav shares have advanced more than 10% after the company announced a $4.2 billion merger with Frontline that would create the world’s largest oil tanker fleet.

With a combined fleet of 69 very large crude carriers and 77 smaller tankers, the new combined company would control approximately 10% of the global VLCC fleet.

Euronav’s shareholders will own 59% of the new company, and it is important to say that the combined group will continue to operate under the name Frontline.

Mr. Hugo De Stoop will head the new combined company as the CEO, and the company will continue to operate from Belgium, Norway, the U.K., Singapore, Greece, and the U.S. Hugo De Stoop, CEO of Euronav, added:

The two organizations would create a single best-in-class, highly competent, and experienced team; enlarged fleet would enable the combined group to provide better service to customers on a global basis.

Fundamentally looking, a merger with Frontline will positively influence the company’s business, and the current shareholders will benefit from this deal.

€13 represents the current resistance

Euronav’s stock price has advanced more than 20% since the beginning of April, and for now, bulls remain in control of the price action.

Data source: tradingview.com

If the price jumps above €12, the next price target could be at €14 or even €15.

The important support level stands at €10, and if the price falls below this level, it would be a “sell” signal, and we have the open way to €8.

Summary

Euronav shares have advanced more than 10% after the company announced a $4.2 billion merger with Frontline, and the new combined company would control approximately 10% of the global VLCC fleet. Euronav’s shareholders will own 59% of the new company, and it is important to say that the combined company will continue to operate under the name Frontline.

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