eeSea Weekly Update: Hamburg Süd and the Long Process of Takeovers

eeSea Weekly Update

Back in November, Germany’s Oetker Group announced they were interested in selling off their shipping business, Hamburg Süd, at that time the seventh-largest container shipper in the world in terms of capacity. Within days, Maersk Line was revealed to be taking over the line, increasing its global share of the market from 15.7% to 18.2%.

Of course, even though the agreement between Oetker Group and Maersk Line happened in such a short time span, it will still take a long time for Hamburg Süd to become officially part of the Maersk family. In fact, it took over three months just for the previously announced agreement to be signed by both parties.

In February Maersk Line expected to receive a decision on the approval of the purchase by the EU antitrust regulator by 27 March; however, that decision deadline could be extended by as much as five months if an investigation was required. For now it has been moved to 10 April as the European Commission last week received concessions from Maersk Line.

What seemed like a quick sale to end 2016 will most likely take until the end of 2017 to be finalized.

Luckily, Hamburg Süd opted out of joining any new alliances, so its takeover hasn’t affected planning by Ocean and THE Alliance members; it will also be able to trade on some 2M routes once the slot purchases it currently has will end with the dissolution of old alliances at the end of the month.

Maersk Hamburg Süd Acquisition

While it is still a long process, the acquisition timeline of Hamburg Süd is not that different from any other mergers and acquisitions that occurred in 2016.

It’s been almost a year since Hapag-Lloyd and UASC first publicly discussed merging; the UASC board approved the sale a few months later, and a Business Combination Agreement was signed by both companies in July. In this case, the European Commission took longer investigating the merger and only granted approval in November 2016. With Hapag-Lloyd a member of the G6 Alliance and UASC sailing with the Ocean Three, the acquisition was more complicated, though the future of several of the alliances was already in limbo after the merger of China Shipping, and COSCO and CMA CGM’s purchase of NOL and its carrier APL.

Even after overcoming all of these hurdles, Hapag-Lloyd announced last week that the merger would not be finalized by the end of March. However, UASC will start sailing as part of THE Alliance, which Hapag-Lloyd leads, until then.

In October, the three major Japanese carriers agreed to merge their shipping businesses. Combining to form the world’s sixth-largest container shipping line doesn’t happen overnight, and MOL, K Line, and NYK are planning accordingly: the joint venture isn’t expected to be established until July this year, and operations will only begin in April 2018. By then the three carriers will have spent a year together in THE Alliance, which will hopefully help ease the transition into a sole shipping line. Most recently Singapore approved the merger of container operations.

Keep your eyes peeled on the eeSea news module: we’ll continue to bring you the latest updates as the Hamburg Süd and UASC takeovers, as well as the Japanese merger, are completed. In a future post we’ll take a look at some of the mergers and acquisitions rumours that have been swirling around for 2017; until then you can stay on top of the news using our “Rumours” tag.