The world’s leading container shipping company, Danish Maersk Line, on Friday said it would pay 3.7 billion euros (US$4 billion) for the acquisition of German competitor Hamburg Sud.
The acquisition, already cleared by US and EU authorities, is part of a consolidation move in the shipping industry where rates paid for freight have been tumbling.
“Maersk Line will acquire Hamburg Sud for 3.7 billion euros on a cash and debt-free basis,” the company said in a statement, adding that it would “finance the acquisition through a syndicated loan facility.”
The transaction has also been approved by Maersk Line’s shareholders and the board of directors of the seller, the family group Oetker Group.
Maersk Line said it hoped to close the transaction by the end of this year.
The US Department of Justice on March 23 approved the proposed acquisition followed by the European Commission’s approval on April 10 under undisclosed conditions.
Hamburg Sud, which controls 134 ships and employs more than 6,000 people, generated 5.64 billion euros in sales last year, while Maersk Line generated US$20.72 billion.
Maersk estimates its global market share in container shipping should rise by 16 percent to 18.7 percent, with a fleet of 743 container ships.
The two companies expect to save between US$350 million and US$400 million in the first two years through their synergies.
“By keeping Hamburg Sud as a separate and well-run company, we will limit the transaction and integration risks and costs while still extracting the operational synergies,” chief executive officer Soren Skou said in a statement, adding the acquisition would “create substantial value to Maersk Line already in 2019.”
The maritime sector, faced with falling shipping rates, has been forced to consolidate over the past few years, leaving just three alliances to run most of the business.
By leading a race to the largest ship size, Maersk has contributed to an overcapacity in the sector, which has badly hurt small operators.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such
SENSOR BUSINESS: The Taiwanese company said that a public tender offer would begin on May 7 through its wholly owned subsidiary Yageo Electronics Japan Yageo Corp (國巨), one of the world’s top three suppliers of passive components, yesterday said it is to launch a tender offer to fully acquire Japan’s Shibaura Electronics Co for up to ¥65.57 billion (US$429.37 million), with an aim to expand its sensor business. The tender offer would be a crucial step for the company to expand its sensor business, Yageo said. Shibaura Electronics is the world’s largest supplier of thermistors, with a market share of 13 percent, research conducted in 2022 by the Japanese firm showed. If a deal goes ahead, it would be the second acquisition of a sensor business since