By Chris Cooper and Kiyotaka Matsuda
(Bloomberg) — Nippon Yusen KK, Mitsui O.S.K. Lines Ltd. and Kawasaki Kisen Kaisha Ltd., Japan’s three largest shipping companies, agreed to merge their container operations into one company. Their shares surged.
The joint company will be set up by July 1, according to a joint statement distributed in Tokyo Monday. Combining the container line business of the three Japanese companies will create an entity that will have a market share of 7 percent, making it the world’s sixth largest, according to the firms.
The global container industry has been going through turmoil since the 2008 financial crisis brought trading to its knees. South Korea’s biggest container-shipping line Hanjin Shipping Co. filed for bankruptcy protection in August while other container lines have tried to cut costs and merge with rivals to tide over the crisis.
Nippon Yusen surged as much as 9.9 percent to 222 yen in Tokyo, the biggest intraday jump since May 2013. Kawasaki Kisen jumped as much as 8.5 percent, the most since March. Mitsui OSK jumped as much as 12 percent, the most since 2008.
Helped by cheap loans, container lines worldwide have hung on even as freight rates to move goods have remained depressed. While A.P. Moeller-Maersk A/S, the world’s biggest container-shipping company, has embarked on a restructuring program, companies like Hapag-Lloyd AG and France’s CMA CGM SA have bought out smaller rivals to consolidate the industry.
–With assistance from Kyunghee Park.
© 2016 Bloomberg L.P