Cargo Business Newswire

Tuesday, September 9, 2014

Top Story

Hapag-Lloyd and CSAV merger to receive conditional EU approval, insiders say

Two inside sources told Reuters that Hapag-Lloyd and Compania SudAmericana de Vapores would win conditional European Union approval for their merger, which will form the world's fourth-largest container shipping company.

The companies received approval from U.S. regulators last month.

EU approval depends on the elimination of some overlapping routes between the consortia in which the companies are members. This would assuage concerns that the deal could reduce competition, said two individuals who declined to be named because the EU decision is not yet public.

Hapag-Lloyd is a member of the G6 alliance along with APL, Hyundai Merchant Marine, Mitsui O.S.K. Lines, Nippon Yusen Kaisha and Orient Overseas Container Line. The G6 operates on the Asia-Europe and Mediterranean trades.

CSAV, majority-owned by Chile’s billionaire Luksic family, is a member of another smaller group.

An anonymous shipping industry source predicted more mergers in the pipeline, saying the Hapag-Lloyd and CSAV deal could be a model for future deals.

"The container industry needs to keep its cost structure low but there is not much flexibility compared with other shipping segments like dry bulk where you can alter fuel consumption and change the way deals are done more easily." the person said. "On that basis, we will see consolidation in the container market out of necessity."

The European Commission is scheduled to decide on the merger by Sept. 11. The EC, Hapag-Lloyd and CSAV all declined to comment on the matter.

For more of the Reuters story: www.reuters.com

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