Ferry and logistics operator DFDS has announced that it will significantly expand is Mediterranean ferry operation having agreed to acquire FRS Iberia/Maroc. A division of German company FRS GmbH & Co. KG, FRS Iberia/Maroc operates three short-sea ferry routes across the Strait of Gibraltar connecting Spain and Morocco.
The acquisition will expand DFDS’ Mediterranean route network. Currently the company’s Mediterranean ferry services link Europe with Türkiye and Tunisia. According to DFDS, the region’s organic market growth is expected to continue to exceed growth levels in northern Europe. Passengers, cars, and freight are all expected to grow by 5-10% annually for the next three years according to the company. Part of this growth is driven by businesses nearshoring manufacturing supply chains closer to end their markets in Europe. Europe is already Morocco’s biggest export market, with 23% of total Moroccan exports bound for Spain
FRS Iberia/Maroc currently has a 28-30% market share on Gibraltar Strait ferry services depending on the traffic being measured. The company competes with Baleària, Naviera Armas, Intershipping, and Attica group backed Africa Morocco Link.
Commenting on the acquisition announcement, Torben Carlsen, CEO of DFDS said:
“We are excited to expand our network to one of Europe’s significant ferry markets that we expect will continue to show high growth underpinned by the ongoing nearshoring of supply chains to Europe”Source: DFDS Investor Announcement
Mathieu Girardin, Head of DFDS’ Ferry Division and EVP, was keen to highlight the potential for DFDS to use its experience to support both tourism and trade. He said:
“This is a great opportunity to scale DFDS’ business model. We will apply our capabilities and experience, not least from the Channel short-sea market, to further develop the Strait of Gibraltar ferry infrastructure while supporting regional tourism and trade”Source: DFDS Investor Announcement
The acquisition, which is subject to regulatory approval, will see DFDS absorb FRS’ Algeciras – Tanger Med, Algeciras – Ceuta, and Tarifa – Tanger Ville routes. FRS Iberia/Maroc is expected to transport a total of 2.3m freight lane metres, 1.9m passengers, and 370k cars in 2023. The busiest route is that between Algeciras and Tangier Med which has a 50/50 revenue split between passenger and freight traffic. Like DFDS’ Dover to Calais route the link is served by three vessels with a crossing time of 90 minutes. FRS Iberia/Maroc owns two of these ferries, the sister-ships TANGER EXPRESS and KATTEGAT. A third RoRo vessel, MIRAMAR EXPRESS, is chartered from another company within the FRS group.
FRS Iberia/Maroc also operates five fast ferries – CUETA JET, ALGECIRAS JET, TARIFA JET, LEVANTE JET, and the recently acquired PONIENTE JET. The Algeciras – Ceuta and Tarifa – Tanger Ville services are normally served by two catamarans each. Both the Cueta and Tanger Ville routes have crossing times of 60 minutes.
DFDS intends to finance the acquisition by a combination of loan financing and use of existing cash funds.