Maersk to Acquire Hamburg Süd

Maersk Line is to take over Hamburg Süd from the Oetker family for an undisclosed sum, believed likely to range from $3bn-$5bn. Maersk says that Hamburg Süd will add 20% to capacity and 26% to revenues, mainly on the North-South trade lanes to Latin America. In a statement the company said the acqusition aims to “create value through a potential recovery of container freight rates, following the recent wave of industry consolidation, with market share of the top-6 liners estimated to surge 12% points to 63%”.

Financial details including takeover price and expected cost synergies will be communicated following the final agreement early Q2, while the transaction is expected to close by end 2017, following regulatory approval in China, Korea, Australia, Brazil, the US and the EU.

Hamburg Süd is a well-run medium-sized container liner, with a fleet of 130 vessels and a combined capacity of 625,000 TEU, accounting for 2.9% of the world fleet (world’s 7th largest). It generated revenues of $6.7bn in 2015, including $6.3bn from its container liner operations, and markets its services through three brands: Hamburg Süd, CCNI (in Chile) and Alianca (in Brazil). It operates a relatively young fleet, with an average age of 6.0 years (versus Maersk Line 9.2 years), with a book value of $2.2bn based on a relatively conservative accounting (depreciating vessels over 12 years vs. Maersk Line 20 years). it has 8 vessels on order, with a combined capacity of 30,400 TEU (5% of existing capacity vs. Maersk 12%).