Manila Bulletin

Maersk to acquire German shipping line Hamburg Sud


COPENHAGEN (Reuters) – AP Moller-Maersk has agreed to buy German rival container shipping line Hamburg Süd, sending shares in the Danish shipping company up nearly 5 percent.

The deal highlights a push to towards consolidat­ion the container shipping industry, which has been grappling with low freight rates and oversupply.

It also follows Maersk's announceme­nt in September that it would focus on transport and logistics and spin off its energy operations.

Hamburg Süd, part of the Oetker Group, is the world's seventh largest container shipping line and operates 130 container vessels primarily in trade between the northern and southern hemisphere­s.

"Hamburg Süd complement­s Maersk Line and together we can offer our customers the best of two worlds," Soren Skou, chief executive of Maersk Line and the Maersk Group, said.

Hamburg Süd has 5,960 employees in more than 250 offices across the world. Last year, the company's revenue was $6.73 billion and of that $6.26 billion came from its container line activities, Maersk said.

Oetker Group is a family-owned German conglomera­te involved in shipping, banking, food and beverages. Market participan­ts had speculated that the Oetker-family would opt to sell its container business.

"Giving up our engagement in shipping after an 80 year-long ownership in Hamburg Süd was not an easy decision for my family," said August Oetker, chairman of the advisory board behind the management holding company of the Oetker Group.

"We are very confident, though, to have chosen the best of all possible partners," he said.

The acquisitio­n will help Maersk Line to boost its presence in global trade, especially in Latin America.

"It's a smaller and more niche player – it's a good strategic fit for Maersk," analyst Michael Jorgensen at Alm. Brand Bank said. He also said the acquisitio­n was a defensive consolidat­ion. Alm. Brand has a "buy" recommenda­tion on Maersk.

The deal will be the first full acquisitio­n by Maersk since taking over P&O Nedlloyd in 2005.

Maersk said the acquisitio­n would be subject to final agreement and regulatory approvals, and would have no impact on Maersk's outlook for 2016.

A.P. Moller-Maersk said it expected to give more details following approval of the purchase agreement which is expected early in the second quarter of 2017.

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