Hamburg Süd rumored to be put up for sale

Several media outlets reported that owners of the Oetker Group, the conglomerate that owns Hamburg Süd, will meet this week to discuss the future of the German ocean carrier.    Several media outlets reported over the Thanksgiving weekend that German ocean carrier Hamburg Süd could be put up for sale.
   Lloyd’s List and the Wall Street Journal are among the newspapers reporting that owners of the Oetker Group, the conglomerate that owns Hamburg Süd, will meet this week to discuss the future of the carrier, a powerhouse in trade to Latin America and Australia, and the seventh largest container carrier. Both outlets reported Monday that Maersk Line might be interested in acquiring Hamburg Süd.
   Maersk and Hamburg Süd told American Shipper they had no comment on the reports.
   Data from BlueWater Reporting’s Carrier Trade Route Splits Report illustrates Hamburg Süd’s weekly allocated capacity on each trade. The carrier has an especially strong presence on the North Europe to East Coast of South America trade, where it allocates 9,672 TEUs per week.
   Hamburg Süd is the largest container carrier not to be a member of one of the major vessel sharing alliances in the East-West trades, but has negotiated vessel sharing agreements with many carriers.
   Other possible buyers for Hamburg Süd mentioned in media reports include COSCO, CMA CGM, and Hapag-Lloyd, but all three of those companies have recently concluded or are in the process of completing major acquisitions or mergers. COSCO merged earlier this year with China Shipping, CMA CGM acquired Neptune Orient Lines and its APL subsidiary, and Hapag-Lloyd is acquiring United Arab Shipping Co.
   Hapag-Lloyd was long considered a natural to merge with Hamburg Süd as both companies are headquartered in Hamburg. After merger talks between the two failed in 2013, Hapag-Lloyd acquired the Chilean carrier CSAV in 2014, another powerful player in trade between South America, Europe and North America.
   Hamburg Süd acquired Chile’s other major container carrier, CCNI, in March 2015.
   A Hapag-Lloyd acquisition of Hamburg Süd today might raise concerns with competition regulators because it would be such a dominant carrier in South American trades.
   Hamburg Süd accounted for 49.5 percent of the Oetker Group’s 12.2 billion euro (U.S. $12.9 billion) in sales in 2015. Food accounted for 24.5 percent of Oetker’s sales in 2015, followed by beer and non-alcoholic beverages at 16.1 percent, wine and spirits at 5.6 percent, and other businesses at 4.3 percent.
   The family-owned company does not reveal information about profits and losses, but in a year-end commentary, Oetker said Hamburg Süd was able to increase its total revenues to 6.057 billion euros in 2015, 16.8 percent more than in 2014. The carrier also increased the number of containers it carried in 2015 to 4.1 million TEUs, 21.5 percent more than the prior year.
   At the end of 2015, Hamburg Süd’s fleet consisted of 189 vessels, with 130 ships deployed in liner services, along with 59 bulk carriers and product tankers. Today, Alphaliner said the company has 117 containerships – 44 owned and 73 chartered – with an aggregate capacity of 602,908 TEUs. It also has eight containerships on order.
   Hamburg Süd said it had 5,960 employees at the end of 2015, an 11.2 percent year-over-year increase, “primarily due to the expansion of the east-west trades, the acquisition of CCNI and organizational and IT projects.”
   Oetker said in 2015, “Despite the weakness in the South American economies (especially Brazil, Argentina and Venezuela), the Group was thus able to achieve the volume growth planned for the reporting year. The acquisition of the container liner activities of CCNI in March 2015, in particular, contributed to this. Freight rates fell by around 16 percent because of high overcapacities and competitive pressure. The resulting revenue shortfall could only partially be compensated for through capacity management and cost reductions. A relatively strong U.S. dollar and the sharp fall in the price of heavy oil had a positive impact on the results, but those positive effects could likewise only partially compensate for the revenue shortfalls.”