Become a Member · About 24/7
Already a member? Login
 
Transportation

Maersk Line to Pay $4 Billion for Hamburg Süd

Maersk has finalized its purchase of container shipping line Hamburg Süd from the Oetker Group after both boards approved a Sale and Purchase Agreement today. By 24/7 Staff



The world's biggest container shipping company Maersk Line will pay $4.02 billion (3.7 billion euros) for its acquisition of smaller German rival Hamburg Süd, it said on Friday.

Combined, the two companies will be able to realize annual operational savings of about $350 million to $400 million, Maersk Line said in a statement fleshing out details on the deal announced in December.

"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," said Soren Skou, CEO of both Maersk Line and its parent A.P. Moller-Maersk Group.

The boards of Maersk Line and the Oetker Group, owner of Hamburg Süd, on Friday approved the proposed deal, which has been given the green light by the European Commission and the U.S. Department of Justice.

Søren Skou

“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”Søren Skou, Group CEO,
A.P. Møller Mærsk A/S

"Maersk paid a significant amount for Hamburg Süd, but considering the wave of consolidation in the industry ... you do not get anything cheaply," Sydbank analyst Morten Imsgard said, adding that the final price was just within his highest estimate.

The proposed acquisition will still need approval from regulatory authorities in countries such as Brazil, China and South Korea, a Maersk spokesman told Reuters, adding that the company expects to secure these by December or early 2018.

"Integration does not start until we have all approvals," he said.

The proposed merger will strengthen the Danish company's presence in global trade, particularly in Latin America, where Hamburg Süd has been long established.

"The job is now to realize those synergy effects, and integrating shipping companies is not without obstacles," Imsgaard said, referring to past acquisitions that have resulted in a loss of market share in some areas.

Maersk is also in the process of spinning off its energy division, either by seeking alliances or a listing, to focus more sharply on its transport division.

Maersk Line expects the Hamburg Süd transaction to close by the end of the year.

Maersk also announced the appointment of Navneet Kapoor as the head of its global business, according to The Economic Times India.

Kapoor was the former chairman of board of the technology unit that supports US retailer Target Corporation Target India, he will be based at the Maersk global headquarters in Copenhagen according to the article.

Related Article: Maersk and Ericsson Team with Silicon Valley’s Plug And Play for Supply Chain & Logistics Program

Related White Papers

Download the Paper

e-Business Disruptions in Global Freight Forwarding
E-business-centred new entrants and new online platforms are starting to convert customers and change how companies buy and transact international shipping services, are freight forwarders at threat of being cast aside, and what are the fundamental changes driven by technology and market conditions? Download Now!


Download the Paper

Consolidation in the Liner Industry
Container shipping remains remarkably fragmented, with the top five operators accounting for less than half the global market, and this presents considerable opportunity for further consolidation. Download Now!




Comments
Be the first to post a comment.
You must be logged in to post a comment. Login.







Supply Chain Logo
Supply Chain 24/7 is the ul­ti­mate online bus­i­ness re­source for Trans­por­ta­tion, Dis­trib­u­tion, Log­istics and Supply Chain pro­fes­sionals.
About Us
Contact Us
Advertise
Privacy Policy
Newsletters
RSS


Follow Us


©2017 SupplyChain247.com is owned and produced by Peerless Media, LLC., a Division of EH Publishing, Inc. All rights reserved.