Germany’s two premier shipping lines, Hapag Lloyd and Hamburg Süd, have announced that they are again in discussion over a possible merger. The world’s sixth and 12th largest box lines said in a joint statement that their executive boards, ‘in agreement with their shareholders, are investigating if, and under what conditions, a merger of both companies would work.’

A merger would create a line ranked fourth in the world behind Maersk Line, Mediterranean Shipping Co (MSC) and CMA CGM, with a total capacity of 1.05 million TEU and 6.3 per cent of world market share. A merged carrier would generate revenue of $13 billion a year and would operate a fleet of 242 owned and charted container vessels, with a further 33 on order.

The carriers already cooperate on certain routes, including Europe-South America and the Mediterranean-US West Coast trades, but the two carriers would be ideal partners for any merger, as both lines concentrate on separate trade lanes. Hapag-Lloyd’s primary focus is on the major east-west trade lanes, where it is a major player, while Hamburg Süd is primarily focussed on north-south trades, and the growing Latin America and Australasia trades.

The two Hamburg-based carriers have been the subject of periodic merger speculation since negotiations broke down in 1997. Both carriers remain fiercely independent and, as neither is publicly listed, they will need to overcome the difficult issue of valuation. While Hapag-Lloyd is the larger of the two carriers, Hamburg Süd is thought to be more profitable. Five years ago an attempt was made to merge Neptune Orient Lines from Singapore with Hapag-Lloyd but the deal fell through due to disagreements. AM

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