Ja­panese ship­pers merge con­tainer units to con­sol­i­date

The Myanmar Times - - International | Business -

SHARES in three Ja­panese ship­ping firms soared yes­ter­day on news that they are merg­ing con­tainer busi­nesses with com­bined an­nual rev­enues of about US$19 bil­lion to counter an in­dus­try down­turn.

Kawasaki Kisen, Mit­sui OSK Lines and Nip­pon Yusen said they have agreed to set up a joint ven­ture with the com­bined op­er­a­tions to start in April 2018, they said.

Mit­sui OSK ended up 5.62 per­cent in Tokyo, hav­ing rock­eted more than 15pc in morn­ing trade.

Nip­pon Yusen closed 6.43pc higher while Kawasaki Kisen cast off most of its ear­lier gains to end 0.38pc higher. The new joint ven­ture will cre­ate the world’s six­th­biggest con­tainer ship­ping busi­ness, they said.

“The con­tainer ship­ping in­dus­try has strug­gled in re­cent years due to a de­cline in the con­tainer growth rate,” a joint state­ment said.

Kawasaki Kisen and Mit­sui OSK will each hold 31pc of the new firm while Nip­pon Yusen will own a 38pc stake, they said. The move comes af­ter South Korean ship­ping gi­ant Han­jin an­nounced plans to shut­ter its Euro­pean busi­ness, fuelling fears it could be head­ing to­wards liq­ui­da­tion.

Han­jin – the South’s largest ship­ping com­pany and once the world’s sev­enth-big­gest – is seek­ing bank­ruptcy pro­tec­tion at home and in the US af­ter cred­i­tors re­jected a plan to deal with a $5.37 bil­lion debt load.

Its bank­ruptcy would be by far the largest in the his­tory of con­tainer ship­ping, which is suf­fer­ing its worst down­turn in six decades ow­ing to slump­ing global trade and a slow­down in China.

In re­sponse to the global down­turn, in­dus­try con­sol­i­da­tion last month saw France’s CMA CGM pur­chase Sin­ga­pore’s Nep­tune Ori­ent Lines while Ger­many’s Ha­pag-Lloyd and United Arab Ship­ping merged in June. –

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