Maersk Line in Deal with Oetker Group
Posted by netrix | Dec 14, 2016
The worldâ€™s largest container shipping company, Maersk Line has struck a deal with Oetker Group to acquire Hamburg Sud, the seventh largest container line.
The agreement, which has to be given the green light by regulators, represents the latest move in Maersk Lineâ€™s new growth strategy. Back in September, the company said it was focusing on growth through acquisition rather than buying new vessels, and this ambitious move is an eye-catching attempt to bolster their position as a world leader.
The acquisition will also bring to an end the eighty-year involvement of the Oetker family in shipping. Although Hamburg Sud generated around half of the Oetker Groupâ€™s sales revenue in 2015, the long-term prospects for the company were uncertain, given the increasing overcapacity in the global container liner industry, and the Oetker Group were not prepared to provide the capital that would allow Hamburg Sud to make its own acquisitions.
The company has a fleet of 130 container ships, with a combined capacity of 625,000 TEU, and employs 5,960 people in over 250 offices across the world. Last year, it had a turnover of US$6.73 billion, US$6.26 billion of which came from its container line.
Should the deal go through, it will give Maersk Line a combined fleet of 741 vessels, reducing the average age of its fleet from 9.2 years to 8.7 years and increasing its container capacity from around 3.1 million TEU to 3.8 million TEU. The acquisition will also see Maersk Lineâ€™s share of total global capacity rise from 15.7% to 18.6%.
The new network resulting from the deal would give both Hamburg SÃ¼dâ€™s and Maersk Lineâ€™s customers access to the specialised end-to-end service offered by Hamburg SÃ¼d in the North-South trade routes, as well as the reach and flexibility provided by Maersk Lineâ€™s global coverage. The larger network will also allow Maersk Line to offer a new range of products with a higher number of port calls and quicker transit times.
Problems with the acquisition are not anticipated, but the regulatory process is expected to last throughout 2017, as the deal has to be approved in a number of major markets, including the United States, the EU, Australia, Brazil, China and Korea. In the meantime, both companies will continue to trade separately as at present.
Commenting on the proposed acquisition, the CEO of Maersk Group, SÃ¸ren Skou said:
â€œToday is a new milestone in Maersk Lineâ€™s history. Hamburg SÃ¼d is a very well-run and highly respected company with strong brands, dedicated employees and loyal customers. Hamburg SÃ¼d complements Maersk Line and together we can offer our customers the best of two worlds, first of all in the North-South trades.â€
The chairman of the Hamburg SÃ¼d Groupâ€™s executive board, Ottmar Gast, said that his company was proud to be partnering with the global market leader, and gave assurances that Hamburg Sud would continue to provide the same level of personalised service to its customers while benefiting from access to a larger shipping network.