Tuesday, April 30, 2019

Asian Container Shipping Line Merger Prompts Divestment of Terminal Handling Facility

Long Beach Freight Asset Sold to Australian Corporate Group
Shipping News Feature
HONG KONG – US – Box line and logistics group Orient Overseas (International) Limited (OOIL) has entered into a Sale and Purchase Agreement to sell 100% of the Long Beach Container Terminal (LBCT) in the Port of Long Beach, California to a consortium led by Macquarie Infrastructure Partners (MIP), for US$1.78 billion. Karl Kuchel, Chief Executive Officer of MIP, commented:

“We are pleased to acquire LBCT, a premier terminal in the largest port complex in North America, which serves as a gateway for trans-Pacific trade. This transaction marks another key milestone in our relationship with OOIL and we greatly appreciate their significant long-term customer commitment to LBCT.

“We look forward to partnering with the Port of Long Beach and the LBCT management team to ensure that LBCT delivers high-quality service to Orient Overseas Container Line (OOCL) and our other customers going forward. We are also committed to completing the current expansion of LBCT by 2022, which will significantly increase the capacity of the terminal."

The sale is undertaken pursuant to the National Security Agreement entered into between OOIL, Faulkner Global Holdings Limited, a subsidiary of COSCO Shipping Holdings, and the US Department of Homeland Security, and the US Department of Justice on July 6, 2018, under which OOIL committed to divest its ownership of the Long Beach Container Terminal business, in order for the US authorities to clear the merger between COSCO Shipping and OOIL. The companies have been cooperating closely in the past few months on shared routes etc,

As part of the sale, Orient Overseas Container Line (OOCL), a subsidiary of OOIL, will also enter into a Container Stevedoring and Terminal Services Agreement with LBCT LLC for a 20-year period. Commenting on the sale, Andy Tung, Co-Chief Executive Officer of OOCL, said:

“Over the past thirty years, we have developed Long Beach Container Terminal into the safest, most efficient and lowest-emission terminal in the United States. We are confident of the future prospects of the terminal under the ownership of MIP and its co-investors, and we look forward to being a long term strategic customer of Long Beach Container Terminal and the Port of Long Beach."

The completion of the sale will be subject to approvals from the relevant regulatory authorities and other customary conditions.

Photo: LBCT (courtesy of Port of Long Beach).