Hapag-Lloyd, Hamburg Süd merger talks break off

   The proposed merger between the container liner companies Hapag-Lloyd and Hamburg Süd has been called off.
   A brief statement from the shareholders of Hapag-Lloyd – the Albert Ballin investment group and the German tourism company TUI – on Sunday indicated the merger had been put on hold at the request of the Oetker Group, the parent company of Hamburg Süd.
   The statement, which was provided only in German, indicated the owners had not been able to agree on the terms of an agreement.
   The Albert Ballin consortium owns 78 percent of Hapag-Lloyd. It consists of the City of Hamburg (36.9 percent), Kühne Maritime (28.2 percent), Signal Iduna (5.3 percent), HSH Nordbank (2.9 percent), M.M. Warburg Bank (2.9 percent) and HanseMerkur (1.8 percent). Another 22 percent is owned by  TUI AG, which is publicly listed in Germany.
   The two companies had said in December they were exploring a combination, which would make them the world’s fourth largest container shipping company in the world, with an owned and chartered fleet of more than 1 million TEUs, behind only Maersk, Mediterranean Shipping Co., and CMA-CGM. Today, according to the information service Alphaliner, Hapag-Lloyd is the sixth biggest carrier with a 657,002-TEU fleet and Hamburg Sud is the 12th largest with a 413,498-TEU fleet.
   There has long been discussion about a possible combination of the two companies, in part because Hapag-Lloyd has a global presence, especially in the major East-West trades, while Hamburg Süd is strong in the North-South trades. In addition, as both companies are based in Hamburg, merging the two would not face the cultural hurdles, like for example bringing together carriers from Europe and Asia.
   Hamburg’s finance minister Peter Tschentscher told the German business newspaper Handelsblatt the city’s Senate still viewed a combination of the two companies as a great opportunity for them to strengthen their market position and was interested in a resumption of the talks.
   Reuters reported that Hapag-Lloyd co-owner Klaus-Michael Kuehne has said that if no agreement with Oetker can be reached, that he would push for Hapag-Lloyd to go public on its own.
   While many analysts thought a merger of the two firms was logical, they also told American Shipper in an article published earlier this year that a deal could be tricky. Talks about merging the two companies in 1997 also reportedly broke down because the two firms were unable to come to an agreement about which firm would have ultimate control.
   This afternoon Hamburg Süd released the following statement:
   “The shareholders of Hapag-Lloyd and Hamburg Süd have jointly arrived at the conclusion to discontinue talks temporarily.
   “Hamburg Süd does not wish to comment publicly on the subject matter of the points under discussion. It does, however, expressly point out that the owners of Hamburg Süd – unlike the impression conveyed in various press articles – positively favour a flotation of the merged new company if certain conditions are met. 
   “The Advisory Board and Executive Board of Hamburg Süd remain firmly of the view that the merger of Hapag-Lloyd and Hamburg Süd would be of enormous benefit for both companies as well as for Hamburg as a shipping location.” – Chris Dupin