Stability Issue: Video Shows Cargo Ship Capesize at Turkish Port
The video below was filmed in Turkey’s Iskenderun Port and shows an incident involving the geared cargo ship Sea Eagle taking place this past Saturday. As you can the ship...
Maersk and China International Marine Containers (CIMC) have abandoned plans for the sale of Maersk’s reefer container business to CIMC after a U.S. Department of Justice investigation found that the planned acquisition would have significantly reduced competition in the market for refrigerated shipping containers and consolidated control of production to China state-owned or controlled entities.
The intended transaction was announced in September 2021 and was expected to close this year after regulatory approvals.
Under the terms of the original agreement, CIMC would have taken over the entire business and assets of Maersk Container Industry (MCI), an A.P. Moller – Maersk company, and its reefer factory in Qingdao, China, known as Maersk Container Industry Qingdao Ltd. The transaction also would have included MCI’s R&D and test engineering facilities in Tinglev, Denmark.
But a thorough investigation by the Justice Department’s Antitrust Division has thrown cold water on the deal. In a statement, the DOJ said the proposed transaction would have combined two of the world’s four suppliers of insulated container boxes and refrigerated shipping containers and concentrated the global cold supply chain, consolidating control of over 90% of global reefer production in Chinese state-owned or state-controlled entities.
CIMC is owned by China Merchants Group and China COSCO Shipping, both of which are state-owned.
For CIMC, the acquisition would have further strengthened its position as the world’s leading producer of shipping containers.
The DOJ cooperated with German competition regulator Bundeskartellamt in the investigation.
“American consumers depend on the global cold supply chain for many of our everyday essentials,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “CIMC’s acquisition of MCI threatened to harm this critical aspect of our economy leading to higher prices, lower quality, and less resiliency in global supply chains. It would have cemented CIMC’s dominant position in an already consolidated industry and eliminated MCI as an innovative, independent competitor. The deal also would have substantially increased the risk of coordination among the remaining suppliers in the marketplace, most of whom would have been aligned through common ownership and related alliances.”
Maersk said the agreement termination was “unfortunate.”
“It is unfortunate that the transaction will not happen despite efforts of all parties involved,” said Patrick Jany CFO at A.P. Moller – Maersk. “Throughout the process MCI has performed very well thanks to the dedication of all its employees. Maersk will continue to be a proud owner of MCI for the foreseeable future, and we will now assess the best structural set-up for MCI to ensure the long-term development of the business.
Founded by Maersk in 1991, MCI currently employs 2,300 people in China and Denmark.
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