Hamburg-based ocean carriers Hapag-Lloyd and Hamburg Sud plan to continue talks early this year of a possible merger that would create the sector’s fourth largest company by capacity.
Hapag-Lloyd and Hamburg Sud, the world’s sixth and 12th largest container shipping lines by capacity, respectively, said in a brief statement they were investigating “if, and under what conditions, a merger of both companies would be of interest,” according to an online report by the Financial Times.
The combination would create the fourth largest container shipping company in the world, with a capacity of more than 1 million 20-foot-equivalent units, almost EUR11 billion in revenues, and a fleet of about 250 vessels.
Its scale would allow it to better challenge larger rivals such as Denmark’s Maersk Line and Switzerland’s Mediterranean Shipping Company.
Reports said the two liners are still in the early stages of talks, but hope to strike a deal sometime March this year.
Hamburg Sud, owned by Germany’s Oetker Group, a family-owned company with food, beverage, and banking interests, is said to have long resisted a tie-up with Hapag-Lloyd, which is 78 percent owned by the Albert Ballin consortium and 22 percent owned by German travel group Tui, even though the two companies have a good strategic fit.
The merger would boost their presence on all major trade lanes, since Hapag-Lloyd concentrates on the east-west lanes, while Hamburg Sud focuses mainly on the Europe-Latin America market, the Financial Times said.
Analysts forecast more consolidation attempts as the industry, currently struggling against high fuel costs, overcapacity, weak demand, and falling rates, faces a bleak outlook over the next two to three years.
Photo: nicksieger
