Japanese ocean liners Kawasaki Kisen Kaisha (K Line), Mitsui O.S.K. Lines (MOL), and Nippon Yusen Kabushiki Kaisha (NYK) announced they have completed securing all the approvals needed to launch their new joint venture (JV) company in April.
The three shipping lines said they obtained on January 18 the green light from South Africa’s competition body to operate their new JV, Ocean Network Express (ONE).
The ONE, established in July 2017, “has received all necessary merger approvals from local competition authorities in regions and countries where such approvals are required” for the launch of its service, said K Line in a release.
As announced on July 3, 2017, the JV company had completed the approval process in all regions and countries except South Africa as of the end of June 2017. Following continued negotiations with the competition authority in that country, the JV company on January 18 obtained approval with conditions requiring measures regarding competition law compliance, the release said.
The Competition Tribunal of South Africa in a release dated January 17, 2018 said it has “approved with conditions the intermediate merger” of the three shipping lines to form a joint venture in the container shipping market.
The three companies are primarily involved in the shipping industry. Their activities include providing various types of shipping services, including container liner shipping, car carrier shipping and bulk shipping, terminal services, logistics services and cruises.
Post-transaction, the firms will continue to compete in the adjacent market for the provision of car carrier shipping and bulk shipping solutions, said the tribunal.
The competition commission had originally prohibited the merger as it felt the transaction would have likely strengthened coordination in the market for the transportation of cars, the liner shipping services, and the bulk shipping services.
However, the commission proposed a range of conditions which addressed its concerns. The merging parties disputed the need for conditions, but indicated that they would agree to be bound by such in the interest of obtaining approval.
The conditions approved by the tribunal address concerns pertaining to the exchange of competitively sensitive information and cross directorships in the adjacent car carrier shipping and bulk shipping businesses between the parties.
Broadly, the conditions prohibit a cross pollination of employees and executives between the container liner JV and adjacent businesses as well as imposing a number of extensive monitoring and reporting mechanisms.
The launch schedule for the service of the new company remains unchanged, with operations slated to begin on April 1, 2018, said K Line.
The trio will operate under the ONE name as part of THE Alliance with members Hapag-Lloyd and Yang Ming.
Photo: StuartMiles
