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Maersk Line acquires Hamburg Süd for $4bn

The sale and purchase agreement for Maersk Line’s acquisition of Hamburg Süd for $4bn was approved by the boards of Maersk Line and the Oetker Group, owner of Hamburg Süd.

On December 1, 2016, Maersk Line announced its intention to acquire Hamburg Süd, the German container shipping line. On March 14, 2017, Maersk Line announced the signing of a sale and purchase agreement with the Oetker Group, owner of Hamburg Süd.

 The acquisition still remains subject to regulatory approvals.

Maersk Line acquired Hamburg Süd on a cash and debt-free basis, and will finance the acquisition through a syndicated loan facility.

Søren Skou, CEO of Maersk Line and AP Moller – Maersk, said: “Today, we have taken a decisive step towards the shared future of Maersk Line and Hamburg Süd. Our due diligence confirmed that Hamburg Süd is a well-run company with strong and highly respected brands. We have confirmed the anticipated synergies and we are convinced that our plan to maximize customer retention is the right path forward. I have no doubt that together we can develop new competitive products to the benefit of our customers and exploit operational synergies. The acquisition is cementing our position as the largest and leading carrier in container shipping, and it will provide great opportunities for the employees of both companies.” 

The acquisition is in line with the Maersk Line’s growth strategy.  It represents a unique opportunity to combine two complementary businesses and realise sizable operational synergies as well as commercial opportunities. Combined, the two companies will be able to realise operational synergies in the region of $350-400mn annually over the first couple of years following completion of the transaction. 

Hamburg Süd will maintain its own structure hereunder its separate brands and is expected to deliver a high customer retention adding to the company’s growth agenda.

The combined network will include increased number of weekly sailings, faster transit times, more port calls, more direct port-to-port calls and less need for transshipment, to the benefits of both Maersk Line and Hamburg Süd customers.

The cost synergies will primarily be derived from integrating and optimizing the networks as well as standardized procurement. In addition, APM Terminals’ global portfolio will benefit from increased volumes, specifically the many investments made in the Latin America Region.

“We consider the purchase price of $4bn a fair valuation of Hamburg Süd. By keeping Hamburg Süd as a separate and well-run company, we will limit the transaction and integration risks and costs while still extracting the operational synergies. The acquisition of Hamburg Süd will therefore create substantial value to Maersk Line already in 2019,” says Skou.

To continue and strengthen the future growth of Hamburg Süd, Maersk Line emphasizes its plans to preserve the customer value proposition of Hamburg Süd. It also commits to maintain the presence of Hamburg Süd in Hamburg, Germany, and has agreed to lease the local head office, initially for a period of five years.

Dr Ottmar Gast, chairman of the Hamburg Süd executive board, said: “We see the acquisition of Hamburg Süd by Maersk Line as a natural development and we are convinced that Hamburg Süd will thrive under continued own management and maintain not only the services offered to its customers, but also provide its employees a fantastic opportunity to continue shaping the future of the industry as a leading service provider.”

With the acquisition, Maersk Line and Hamburg Süd will have a total container capacity of around 3.9 million TEU and an 18.7% global capacity share. The combined fleet will consist of 743 container vessels.

The shipping company expects to close the transaction by the end of 2017. Until then, Hamburg Süd and Maersk Line will continue business as usual as separate and independent companies.

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