Media reports in South Korea reported that the German line requested an Information Memorandum from Samsung Securities, which is handling the sale of HMM shares, and could have bid for HMM, with the closing date set for offers on 21 August.
The carrier has not confirmed that it entered the bidding process, but it has appointed advisors in Goldman Sachs.
A spokesman for Hapag-Lloyd would not confirm or deny the company’s interest in HMM, telling Seatrade Maritime News, “Hapag-Lloyd is always studying possibilities to further develop and grow our business. In that context we also explore whether investing in other Liner businesses could create an even stronger player in the global shipping industry.”
One analyst put it another way, “HMM is for sale so why wouldn’t they look at it?”
All the major shipping lines have seen very large profits over the past two years, and they are awash with money, he said, adding, “I’m sure that every large carrier has had a look.”
Hapag-Lloyd has a considerable history expansion through M&A acquiring CP Ships, merging UASC into operations, taking over CSAV's liner business, and acquiring NileDutch.
However, belts may be being tightened in the container shipping sector, H1 volumes were down in all trades except Africa, while rate levels have prompted the carrier to maintain its 2023 EBIT forecast at $2.1-$4.3 billion, significantly down from 2022, which saw an EBIT of $19.13 billion.
Moreover, Hapag’s five major shareholders, CSAV, Klaus Michael Kuhne, investment company HGV, Qatar Investment Authority and the Saudi’s Public Investment Fund, enjoyed a bumper payout in dividends at the close of 2022.
According to Alphaliner data liquidity in the carrier fell dramatically from €12.6 billion at the end of last year, to €3.6 billion on 30 June 2023.
In order for Hapag-Lloyd to buy it’s THE Alliance partner in HMM it seems the cash is available, if its forecasting goes to plan.
Seoul’s financial institutions, the Korea Development Bank (KDB) and Korea Ocean Business Corp (KOBC) hold a combined 40.65% of shares valued at $746 million as well as $2 billionn in convertible bonds. Korean media reports the total estimated sale price for the line is $3.74 billion.
Five South Korean companies have registered an interest - Harim Group, Dongwon Group and LX Group, Samra Midas Group, and Global Sae-A. The shortlist is scheduled to be announced by November.
Synergies between the German line and HMM are clear, as both are members of THE Alliance, and Hapag-Lloyd is keen to boost its presence in the major trades on the Pacific and from Asia to Europe, while HMM also has significant foothold on intra-Asian trades.
Fleet expansion would see Hapag-Lloyd add around 1 million teu in capacity to its fleet with 83 ships already operational and a further 265,000 teu on order, according to S&P Global data released in March this year.
Hapag-Lloyd already operates 258 vessels, with a combined capacity of 1.9 million teu and has an orderbook consisting of 362,616 teu according to S&P Global figures.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited.
Add Seatrade Maritime News to your Google News feed.  |
