Friday, April 25, 2014

Hapag-Lloyd, CSAV Sign Merger Agreement

By Mark Edward Nero

German shipping company Hapag-Lloyd AG and Chilean shipper Compañía Sud Americana de Vapores (CSAV) have signed a binding contract to merge CSAV’s entire container business with Hapag-Lloyd, the two container moving businesses have confirmed.

The deal, which was announced April 16, is still subject to the necessary regulatory approvals.

Following the integration, the new Hapag-Lloyd is expected to rank among the four largest liner shipping companies in the world, with 200 vessels with total transport capacity of around one million 20-foot equivalent units, and an annual transport volume of 7.5 million TEU.

The company’s head office is expected to remain in Hamburg, Germany, but Hapag-Lloyd says it will also have a strong regional office in Chile for its Latin America business.

In return for contributing its container business, CSAV is expected to become a new Hapag-Lloyd core shareholder and will initially hold a 30 percent stake in the combined entity.

“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,” Hapag-Lloyd Executive Board Chairman Michael Behrendt said upon signing the agreement.

CSAV CEO Oscar Hasbún said that by joining forces, the two companies are creating a “stronger, larger and more global company” with significant economies of scale and an improved competitive position.

“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.