On Friday, the sale and purchase agreement for Maersk Line's acquisition of Hamburg Süd was approved by the boards of Maersk Line and the Oetker Group, owner of Hamburg Süd. The acquisition still remains subject to regulatory approvals.
Maersk Line announced its intention to acquire Hamburg Süd in December last year, and on March 14, 2017, Maersk Line announced the signing of a sale and purchase agreement.
Maersk Line will acquire Hamburg Süd for EUR 3.7 billion ($4 billion) on a cash and debt-free basis. Maersk Line will finance the acquisition through a syndicated loan facility.
"The acquisition is cementing our position as the largest and leading carrier in container shipping, and it will provide great opportunities for the employees of both companies," says Søren Skou, CEO of Maersk Line and A.P. Moller - Maersk.
The acquisition is in line with the Maersk Line's growth strategy. It represents a unique opportunity to combine two complementary businesses and realize sizable operational synergies as well as commercial opportunities, said the company in a statement. Combined, the two companies will be able to realize operational synergies in the region of $350-400 million annually over the first couple of years.
Hamburg Süd will maintain its own structure with its separate brands and is expected to deliver a high customer retention adding to Maersk Line's growth agenda.
The combined network will include increased number of weekly sailings, faster transit times, more port calls, more direct port-to-port calls and less need for transshipment, to the benefits of both Maersk Line and Hamburg Süd customers.
The cost synergies will primarily be derived from integrating and optimizing the networks as well as standardized procurement. In addition, APM Terminals' global portfolio will benefit from increased volumes, specifically the many investments made in the Latin America Region.
"We consider the purchase price of EUR 3.7 billion a fair valuation of Hamburg Süd. By keeping Hamburg Süd as a separate and well-run company, we will limit the transaction and integration risks and costs while still extracting the operational synergies. The acquisition of Hamburg Süd will therefore create substantial value to Maersk Line already in 2019," says Skou.
Maersk Line committed to maintain the presence of Hamburg Süd in Hamburg, Germany, and has agreed to lease the local head office, initially for a period of five years.
"We see the acquisition of Hamburg Süd by Maersk Line as a natural development and we are convinced that Hamburg Süd will thrive under continued own management and maintain not only the services offered to its customers, but also provide its employees a fantastic opportunity to continue shaping the future of the industry as a leading service provider," says Dr Ottmar Gast, Chairman of the Hamburg Süd Executive Board.
With the acquisition, Maersk Line and Hamburg Süd will have a total container capacity of around 3.9 million TEU (3.3 million TEU) and an 18.7 percent (16.0 percent) global capacity share (Alphaliner April 24, 2017). The combined fleet will consist of 743 container vessels.
The process of obtaining regulatory approvals is on schedule. On March 23, 2017, the U.S. Department of Justice approved the proposed acquisition and on April 10, 2017, the E.U. Commission approved the proposed acquisition, subject to conditions.
Maersk Line expects to close the transaction by the end of 2017.