Maersk Line to acquire Hamburg Süd for USD4bn

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Maersk Line to acquire Hamburg Süd for USD4bn

Maersk Line has announced that the acquisition of Hamburg Süd, the German container shipping line, was approved by the boards of and the Oetker Group. The acquisition still remains subject to regulatory approvals.

Maersk Line will acquire Hamburg Süd for €3.7 billion (US$4 billion) on a cash and debt-free basis. Maersk Line will finance the acquisition through a syndicated loan facility.

Hamburg Süd is the world’s seventh largest container shipping line and a leader in the North – South trades. The company operates 130 container vessels with a container capacity of 625,000 TEU (twenty-foot equivalent). It has 5,960 employees in more than 250 offices across the world and market its services through the Hamburg Süd, CCNI (based in Chile) and Aliança (based in Brazil) brands. In 2015, Hamburg Süd had a turnover of USD 6,726 million of which USD 6,261 million stems from its container line activities. 

The acquisition is in line with the Maersk Line’s growth strategy. It represents an opportunity to combine two complementary businesses and realise sizable operational synergies as well as commercial opportunities. Combined, the two companies will be able to realise operational synergies in the region of US$350-400 million annually over the first couple of years following completion of the transaction. 

The combined network will include increased number of weekly sailings, faster transit times, more port calls, more direct port-to-port calls and less need for transhipment, to the benefits of both Maersk Line and Hamburg Süd customers.

With the acquisition, Maersk Line and Hamburg Süd will have a total container capacity of around 3.9 million TEU and an 18.7% global capacity share. The combined fleet will consist of 743 container vessels.

The process of obtaining regulatory approvals is on schedule. On 23 March 2017, the US Department of Justice approved the proposed acquisition and on 10 April 2017, the EU Commission approved the proposed acquisition, subject to conditions. 

The agreement was announced in Decmber 2016. Maersk Line expects to close the transaction by the end of 2017. Until then, Hamburg Süd and Maersk Line will continue business as usual as separate and independent companies.

Søren Skou, CEO of Maersk Line and A.P. Moller – Maersk, said:

“Today, we have taken a decisive step towards the shared future of Maersk Line and Hamburg Süd. Our due diligence confirmed that Hamburg Süd is a well-run company with strong and highly respected brands. We have confirmed the anticipated synergies and we are convinced that our plan to maximize customer retention is the right path forward. I have no doubt that together we can develop new competitive products to the benefit of our customers and exploit operational synergies. The acquisition is cementing our position as the largest and leading carrier in container shipping, and it will provide great opportunities for the employees of both companies.”

“We consider the purchase price of €3.7 billion a fair valuation of Hamburg Süd. By keeping Hamburg Süd as a separate and well-run company, we will limit the transaction and integration risks and costs while still extracting the operational synergies. The acquisition of Hamburg Süd will therefore create substantial value to Maersk Line already in 2019.”

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