Maersk to buy German shipping line Hamburg Sud
By Jacob Gronholt-Pedersen
COPENHAGEN (Reuters) - Maersk Line, the world's biggest shipping company, is to buy smaller rival Hamburg Süd, joining a wave of M&A in the industry just over two months after the Danish company revealed plans to bolster its transport operations.
The deal, announced by parent A.P. Moller-Maersk (MAERSKb.CO: Quote) on Thursday, is the group's first full takeover in more than a decade and highlights a consolidation drive in container shipping, which has been grappling with low freight rates and oversupply.
It also follows Maersk's new boss Soren Skou's move to focus on transport and logistics and spin off the company's energy operations.
Maersk shares rose more than 5 percent.
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. Maersk has a fleet of more than 600 ships.
"This will provide us with a very strong platform in Latin America," Skou, chief executive of Maersk Line and the Maersk Group, said on a conference call, noting "significant" cost benefits from combining the companies' network.
Skou declined to disclose the value of the deal, but said it would be a cash only transaction, and that Maersk did not need to sell other assets to ahead with the purchase.
He also said Maersk would be looking at a "light-touch integration" of family-owned Hamburg Süd, keeping both the brand name and the company's headquarters in Hamburg. Continued...