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Frontline and Frontline 2012 agree to merge

Staff writer |
Frontline Ltd. and Frontline 2012 Ltd. entered into an agreement and plan of merger with Frontline as the surviving legal entity and Frontline 2012 as a wholly-owned subsidiary.

Subsequent to the merger, this subsidiary is expected to merge into the Surviving Company which will retain the Frontline Ltd. name.

After the merger is completed the combined company expects to become one of the world's leading tanker companies with a total fleet of approximately 90 vessels, consisting of approximately 25 VLCCs, 17 Suezmax tankers, 16 MR product tankers and 10 LR2 Aframax tankers.

This includes approximately 20 vessels on time charter in or under commercial management. The Combined Company will also have a newbuilding program of approximately 22 vessels, which are scheduled to be delivered in the period 2015 - 2017.

Shareholders in Frontline 2012 as of the time the merger is completed will receive shares in Frontline as merger consideration. One share in Frontline 2012 will give the holder the right to receive 2.55 shares in Frontline.

The exchange ratio is based on June 30, 2015 NAV broker estimates for Frontline and Frontline 2012. Frontline is expected to issue a total of approximately 584 million shares to shareholders in Frontline 2012 following cancellation of treasury shares held by Frontline 2012 and Frontline 2012 shares held by Frontline subject to rounding for fractional shares.

Frontline's ordinary shares are currently listed for trading on the New York Stock Exchange, the Oslo Stock Exchange and the London Stock Exchange and Frontline 2012's ordinary shares are currently registered on the Norwegian over-the-counter list. In accordance with the Merger Agreement, the combined company will continue Frontlines current three listings.

Completion of the merger is subject to the execution of certain definitive documents, customary closing conditions and regulatory approvals.

The merger is also subject to approval by the shareholders of Frontline and Frontline 2012 in special general meetings expected to be held in the fourth quarter of 2015 and the merger is expected to close as soon as possible thereafter.

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