HAMBURG SÜD
will go to MOELLER-MAERSK till the end of 2017. The shipping arm of Danish
conglomerate A.P. MOELLER-MAERSK A/S,
the world's biggest shipping company, is to buy smaller rival HAMBURG SÜD (HAMBURG SÜDAMERIKANISCHE DAMPFSCHFFAHRTSGESELLSCHAFT),
joining a wave of M&A in the industry just over two months after the Danish
company revealed plans to bolster its transport operations. While it has bought or chartered ships from
distressed peers like Korea’s Hanjin Shipping Co., which declared bankruptcy in August,
Maersk’s last full-scale acquisition was in 2005 when it bought P&O
Nedlloyd. The container market is in turmoil since the finance crisis of 2007.
Rates for shipping containers fell significantly near sero.
Ottmar Gast CEO of Hamburg Süd - courtesy HAMBURGER ABENDBLATT
According to
Ottmar Gast HAMBURG SÜD was courted like a beautiful bride with a big dowage.
The deal,
announced by parent A.P. Moller-Maersk (MAERSKb.CO) on Thursday, is
the group's first full takeover in more than a decade and highlights a
consolidation drive in container shipping, which has been grappling with low
freight rates and oversupply. It also follows Maersk's new boss Soren Skou's
move to focus on transport and logistics and spin off the company's energy
operations. Maersk shares rose more than 5 percent.
Hamburg Süd vessel - courtesy HAMBURGER ABENDBLATT
HAMBURG SÜD,
part of the OETKER GROUP, is the world's seventh largest container shipping
line and operates 130 container vessels primarily in trade between the northern
and southern hemispheres. MAERSK has a fleet of more than 600 ships.
"This
will provide us with a very strong platform in Latin America," Skou, chief
executive of MAERSK LINE and the MAERSK GROUP, said on a conference call,
noting "significant" cost benefits from combining the
companies' network.
Skou declined
to disclose the value of the deal, as OETKER did, but said it would be a cash
only transaction, and that MAERSK did not need to sell other assets to ahead
with the purchase. He also said MAERSK would be looking at a "light-touch
integration" of family-owned HAMBURG SÜD, keeping both the brand name and
the company's headquarters in Hamburg. "I would imagine that more
consolidation can happen in the future. Even with this acquisition, the market
is still quite fragmented, and I would be surprised if this was the final
piece," Skou said.
With the
acquisition, MAERSK LINE will increase its container capacity to around 3.8
million TEU (20-foot Equivalent Unit), boosting its market share to 18.6
percent from 15.7 percent, it said. MAERSK's combined fleet will consist of 741
container vessels with an average age of 8.7 years, compared with 9.2 years
before the deal.
The
transaction will help MARSK LINE to boost its presence in global trade,
especially in Latin America where HAMBURG SÜD has had a strong presence since
its foundation in 1871 by representatives of Hamburg merchant houses.
"It's a
smaller and more niche player – it's a good strategic fit for MAERSK,"
analyst Michael Jorgensen at Alm. Brand Bank said. He described the acquisition
as a defensive consolidation. Alm. Brand has a "buy" recommendation
on MAERSK.
HAMBURG SÜD
has 5,960 employees in more than 250 offices across the world. Last year, the
OETKER GROUP's revenue was $12.73 billion and of that $6.26 billion came from
its container line activities in HAMBURG SÜD, MAERSK said. Hopefully the strong
ties of the employees will stay, as the OETKER GROUP had a very specific
employment philosophie which guaranteed loyality. And MAERSK announced not to
change it. Therefore with the sale all HAMBURG SÜD employees will get a
"Thank you gratification" for being loyal to the company. OETKER
GROUP is involved in shipping, banking, luxury hospitality, food and beverages.
There had been speculation in the shipping market that the OETKER-family would
opt to sell its container business.
Top and below OETKER beverage portfolio beer - courtesy OETKER
OETKER beverage portfolio sparkling wine - courtesy OETKER
Top and below OETKER kitchen aid and conveneance products - courtesy OETKER
OETKER chemistry portfolio - courtesy OETKER
OETKER portfolio banking BANKHAUS LAMPE - courtesy OETKER
The Lanesborough Oetker Collection - courtesy Oetker Hotelmanagement
The sale is
not an emergency sale, but to be fit for the future in an uncertain market,
massive investments had to be made, which the family could not make on its own,
or with his own bank - BANKHAUS LAMPE. "Giving up our engagement in
shipping after an 80 year-long ownership in HAMBURG SÜD was not an easy
decision for my family," said August Oetker, chairman of the advisory
board behind the management holding company of the OETKER GROUP. HAMBURG SÜD
has made no losses as some reported, but HAMBURG SÜD was a single in a merging
market and alone without any cooperation or alliance. But a well reputated market leader in the South Atlantic trade.
CAP SAN DIEGO, today a preserved Cap San Class vessel, The White Swans of the South Atlantic - own collection
Other
container lines have been looking to do deals to build scale. Family-owned
French group CMA CGM sealed an acquisition this year of Singapore-based NEPTUNE
ORIENT LINES, which has given it market leadership on trans-Pacific routes.
Building
scale is behind the growing of OETKER COLLECTION since 2010 when there had been
moves to sell the 5star top luxury hotels. Amoung these are the HOTEL CAP EDEN ROC, LE
BRISTOL, Paris and others, amoung the new hotels is FREGATE ISLAND in the Seychelles.
International a synoym for South America trading HAMBURG SÜD - poster copy own collection
Last week,
the European Commission gave conditional approval to a merger between German
container shipping line HAPAG-LLOYD (HLAG.DE) and the UNITED ARAB SHIPPING COMPANY. In
2012/13, a planned merger between HAPAG-LLOYD with rival HAMBURG-SÜD was called
off some time as terms could not be agreed. In first place the younger family
members had been disagreeing. This solution but was the wish of the politics in the
interest of saving employment and taxes in Hamburg, but without a further
financial engagement of the city of Hamburg, as in HAPAG-LLOYD. But too the HL puchasing of
the Chilenean CSAV was a reason not to merge.
MAERSK containers - courtesy MAERSK LINE
MAERSK said
the deal would be subject to final agreement and regulatory approvals, and
would have no impact on MAERSK's outlook for 2016. A.P. MOELLER-MAERSK said it
expected to give more details following approval of the purchase agreement
which is expected early in the second quarter of 2017.
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