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Hamburg Süd Not Ruling Out A Three-Way Alliance

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April 1, 2014

Alianca Santos, image: Hamburg Sud

By Nicholas Brautlecht

April 1 (Bloomberg) — Hamburg Sued Group, Germany’s second biggest container shipping line, may revive merger plans with Hapag-Lloyd AG after a failed attempt to combine operations with its local peer last year.

A “three-way alliance may be on the agenda at some point” after Hapag-Lloyd’s planned takeover of the container-shipping operations of Valparaiso, Chile-based Cia. Sud Americana de Vapores SA, Chief Executive Officer Ottmar Gast said at the carrier’s annual media conference in Hamburg today.

“It would be good to offer a more global product portfolio, so we remain open and interested to manage at some point what we didn’t manage last year,” Gast said.

The container shipping industry has suffered from overcapacity since the global financial crisis triggered a trade slump and the worst fall in prices for carrying cargo since containerization became global in the 1970s.

Hamburg Sued reported “a mere 1 percent rise” in volume to 3.3 million standard 20-foot containers last year, while sales fell 3.9 percent to 5.3 billion euros ($7.3 billion) on a weak dollar and low freight rates, Gast said. The company, which operates 103 container vessels and is owned by the Oetker family, doesn’t disclose profit.

Consolidation in the container industry has gained momentum in recent months after several years of stagnation. Hapag-Lloyd, Germany’s industry leader with a fleet of 151 vessels, turned to CSAV after talks to merge with Hamburg Sued failed more than a year ago because shareholders of both companies couldn’t agree on terms. The CSAV deal likely will close by the end of the month and will make Hapag-Lloyd the world’s fourth-largest container carrier.

MPC, Ahrenkiel

MPC Group, another Hamburg-based shipping company, announced today that it bought local peer CF Ahrenkiel Group, which put itself up for sale as part of a restructuring effort pushed by its creditors, including HSH Nordbank, the world’s biggest shipping lender.

Ahrenkiel’s shipping activities will be pooled with those of the MPC Group’s MPC Muenchmeyer Petersen Steamship and a third Hamburg-based shipping company called Thien & Heyenga.

“With 62 ships in technical management, this will create a new shipping group that ranks among the world’s top ten managing owners in the container sector,” MPC said in a statement.

In a further sign of container industry consolidation, the U.S. Federal Maritime Commission cleared the way for the so- called P3 network sharing agreement of the world’s top three carriers last month.

A.P. Moeller-Maersk A/S, the world’s largest container line, plans to pool vessels with Mediterranean Shipping Co. and CMA CGM SA under the P3 roof and cooperate on the world three largest trade lanes, Asia to Europe, transpacific and transatlantic. The approvals of the European and Chinese competition authorities are expected in the coming months.

To contact the reporter on this story: Nicholas Brautlecht in Hamburg at [email protected] To contact the editors responsible for this story: Angela Cullen at [email protected] James Kraus, Kim McLaughlin

Copyright 2014 Bloomberg.

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