Saturday, November 22, 2014

Container Shipping Lines Freight Agreement Ratified

Mexican Authorities Give the Nod but Two More to Go
Shipping News Feature

MEXICO – WORLDWIDE – The proposed merger between Hapag Lloyd and Compañía Sud Americana de Vapores (CSAV) is close to being finalised after the Mexican completion regulator approved the transaction unconditionally. Only two antitrust authorities, Ukraine and China, have yet to announce their decisions, but if approved, the merged company will become the fourth largest container shipping company in the world with some 200 vessels, an annual transport volume of 7.5 million TEU and a combined turnover of approximately $12 billion.

Regulatory entities in the US and the European Union, among others, have already given their approval, Brazil being the most recent. Approvals of a few jurisdictions are still pending but it seems the current fashion for closer association between major carriers continues apace with CSAV and Hapag-Lloyd having signed a binding agreement to merge their box freight businesses earlier this year. Straightforward mergers are of course relatively simple for the authorities to judge but other, less formal arrangements are more difficult to contend with.

It would seem that CSAV need this deal more than the German line having had to go cap in hand to shareholders earlier this year after more disappointing results, the company fared worst on an Alphaliner report which studied the performance of the world’s leading box carriers but has rallied in the past few months. CSAV currently sit at 20 in terms of fleet size whilst Hapag Lloyd occupies 6th spot. The two companies have stated previously that their combined annual savings with this deal will produce around $300 million.