Hapag-Lloyd and CSAV have signed a memorandum of understanding regarding a possible merger of their container shipping liner services, taking merger talks “into the next phase.”
In a statement issued this afternoon, Hapag-Lloyd said: “The talks between Hapag-Lloyd and CSAV about combining the container liner shipping activities of CSAV with Hapag-Lloyd are going into the next phase. Both companies have signed a memorandum of understanding, which is not binding. As the next step, the due diligence will take place, after which a binding contract could follow.”
An unnamed Hapag-Lloyd manager had told Die Welt last week that the carrier wants to reach a deal by the end of this month. The Die Wiet article reported that CSAV would acquire a 30 percent stake in the enlarged Hapag-Lloyd, but it is unclear whether the Chilean container line’s 54 ships are part of the transaction.
CSAV confirmed that it would have a 30 percent share of the expanded Hapag-Lloyd in its announcement of the MoU today, noting that it would be the largest shareholder.
It said that it would sign a control agreement with current Hapag-Lloyd shareholders HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement and Kuehne Maritime GmbH; the three together would hold about 75.5 percent of the shares of the combined entity.
CSAV said that the parties have also agreed to develop a business plan to increase efficiency and renew the fleet of container vessels. The proposed transaction would include two capital increases for the combined carrier within the first 12 months after the deal goes through: (1) a €370 million increase — of which CSAV would provide €259 million — within the first 100 days after the transaction; and (2) a second €370 million increase expected to be raised through an IPO of the combined Hapag-Lloyd within a year after the merger. CSAV’s contribution to the first capital infusion would give it a stake of nearly 34 percent in the combined carrier.
Die Welt quoted Klaus-Michael Kuehne, Hapag-Lloyd’s second largest shareholder with a 28.2 percent stake, saying: “I see good chances of clinching a deal [with CSAV].”
This is not the first time the two carriers have contemplated joining forces; they considered a cross-ownership deal several years ago.
A combined Hapag-Lloyd-CSAV would surpass Taiwan’s Evergreen Line as the world’s fourth largest carrier, with a fleet capacity of just over 998,000 TEUs and a 5.6 percent global market share in terms of capacity deployed, according to Alphaliner.
Bulk, reefer and car carrier shipping businesses will be excluded from the transaction, CSAV said.
Hapag-Lloyd Chairman Juergen Weber recently called on Germany’s second largest carrier, Hamburg Süd, to join the merger talks with CSAV, but that line has not yet indicated whether it will look to join in the talks. Hapag-Lloyd and Hamburg Süd called off merger negotiations in March 2013 after failing to agree on the ownership split in an enlarged company.
----FM JOC
