Hapag-Lloyd and Hamburg Sud are in preliminary negotiations over a merger that would create the world’s fourth-largest ocean carrier and likely trigger a fresh round of consolidation in the fragmented container shipping industry.
The German carriers today said they “are investigating if, and under what conditions, a merger of both companies would be of interest.”
A merged carrier would generate revenue of $13 billion a year and operate a fleet of 242 owned and chartered container ships with a further 33 on order.
It would rank fourth, behind Maersk Line, Mediterranean Shipping Co. and France’s CMA CGM, with total capacity of 1.05 million 20-foot-equivalent units and a 6.3 percent world market share, according industry analyst Alphaliner.
The two Hamburg-based carriers have been the subject of periodic merger speculation since negotiations broke down in 1997 because of differences over financial terms and control of a combined line.
There would be little overlap in a merged carrier, as Hapag-Lloyd is a major player on the key east-west routes linking Asia, Europe and North America, while Hamburg Sud focuses on the north-south trades and has a strong presence in the fast-growing Latin American market.
As a subsidiary of the family-owned Oetker insurance-to-pizza conglomerate, Hamburg-Sud would be able to quickly make decisions about joining forces with Hapag-Lloyd.
Agreeing on terms would be more complicated for Hapag-Lloyd, which has to satisfy several powerful investors, including the city of Hamburg, which has a 37 percent stake; Klaus-Michael Kuehne, the billionaire owner of global freight forwarder Kuehne + Nagel, who owns just over 28 percent of the carrier; and TUI, Europe’s largest tour operator, which holds a 22 percent stake.
Klaus Michael Kuehne told German business paper Handelsblatt in September that he favored an “ideal” merger with Hamburg Sud so the enlarged carrier could compete with industry leaders Maersk Line and Mediterranean Shipping Co.