Germany's Hapag-Lloyd and Chile's Compañía Sud Americana de Vapores (CSAV) signed a binding contract Wednesday to merge CSAV’s entire container business with Hapag-Lloyd.
The relevant corporate bodies of both companies have already approved
the merger. The closing of the transaction is subject to the approval of
Another condition is that not more than 5 percent of CSAV's minority shareholders exercise their appraisal rights until April 20. Until then, dissident CSAV shareholders have the right to
withdraw. The company defined that this appraisal right should be
exercised by holders of less than 5 percent of the company’s total
shares in order for the merger with Hapag-Lloyd to be completed.
Following the merger, Hapag-Lloyd will be catapulted ahead of Evergreen and COSCO to become the fourth-largest liner shipping company world after Maersk, MSC and CMA CGM.
The merged companies will have about 200 owned and chartered ships with total transport capacity of around 1 million TEUs; they will transport about 7.5 million TEUs annually. Combined sales will be about €9 billion ($12.4 billion).
Hapag-Lloyd’s head office will remain in Hamburg, and the company will have a strong regional office in Chile for its Latin America business, according to officials.
CSAV will hold a 30-percent stake in Hapag-Lloyd and will become a core shareholder along with HGV, a holding company for the City of Hamburg, and Kühne Maritime. The partners have agreed on a capital increase of €370 million once the transaction has been concluded, to which CSAV will contribute €259 million. This will then increase CSAV’s share of Hapag-Lloyd to 34 percent. A second capital increase of EUR €370 million will be linked to Hapag-Lloyd’s planned stock exchange listing.
“I am delighted that we have succeeded in concluding this partnership through which our two companies are playing an active part in consolidating the liner shipping industry. This day is an important milestone in the history of Hapag-Lloyd,” said Michael Behrendt, chairman of the executive board of Hapag-Lloyd, upon signing the agreement. “The transaction increases the value of the company and, therefore, also the value of our shareholders’ shares.”
Oscar Hasbún, chief executive officer of CSAV, said the merger is "creating a stronger, larger and more global company with significant economies of scale and a considerably improved competitive position."
Hapag-Lloyd officials said the service networks and fleets of both companies "complement one another ideally," adding that the combination of the two companies will result in annual synergies of at least $300 million.
“The combination with CSAV, Latin America’s leading container shipping line, considerably strengthens Hapag-Lloyd in this growth market and adds a strong position in the North-South traffic to the company’s global network and to its established strength in East-West traffics," Hasbún said.
According to a press release about the merger, the new ship orders of the two companies are complementary. At end of April, Hapag-Lloyd will put into service the last of ten 13,200-TEU vessels ordered for the Far East trade, and CSAV still has seven vessels, each of 9,300 TEUs, scheduled for delivery in 2014 and 2015. These container ships are specially designed for the South American trade.
“This means that we will have a young and cost-efficient fleet. The use of optimum tonnage in the trades is one of the key prerequisites for successful operations in the face of international competition,” Hasbún said.
Behrendt said the merger will help Hapag-Lloyd increase service to its clients. “By integrating CSAV’s container business, Hapag-Lloyd is able to build on its strengths and is, therefore, in an excellent position for future growth,” he said.