Even with the support in principal of both sets of shareholders, continued pressures of a dire container market and competition from giants CMA CGM, MSC and Maersk Line, talks to create the world's fourth largest box line lasted just three months.
Balancing ownership of the merged entity after the merits of Hapag-Lloyd's larger fleet and EUR 1.8bn debt were stacked against Hamburg Süd's smaller, less financially burdened fleet proved too difficult this time round, with both sides concluding that management and ownership details were not about not be agreed.
After media speculation suggested the talks had stalled on a conflict over an IPO of the new company, Hamburg Süd were quick to clarify that they support floatation of the merged company "if certain conditions are met," adding that their boards believe the merger to be of benefit to both companies and Hamburg.
Hapag-Lloyd has long been at the centre of merger speculation in container shipping. They have been linked to Singapore’s Neptune Orient Lines (NOL) as far back as 15 years ago around the time when NOL acquired US line APL.
More recently the short bidding war for Hapag-Lloyd in 2008 again ended without consolidation as Neptune Orient Lines (NOL) withdrew, leaving Hamburg based investment group Albert Ballin Consortium victorious, taking two thirds of Hapag-Lloyd with a bid valuing the company at EUR 4.45bn.
That skirmish was a forerunner to the resignation of NOL's then German president and ceo Thomas Held. Indeed at the time there was a 300-strong march against the possible NOL merger by Hapag-Lloyd employees in Germany and a call for the resignation of TUI ceo Michael Frenzel from Norwegian billionaire John Fredriksen. The Norwegian shipping tycoon has figured large for both NOL and Hapag Lloyd having previously mounted a hostile takeover of NOL, which while he failed in, he did make a tidy profit from.
Five years ago Fredriksen argued that TUI's move to sell Hapag-Lloyd was at the worst possible time, just as the global financial crisis was starting its assault on the fortunes of shipping and the market value of the German box line.
Despite all that has happened talks of links between Hapag-Lloyd NOL continue and speaking ahead of the collapse in negotiations in a recent interview with Die Welt, major Hapag-Lloyd shareholder Michael Kuhne went on record with his thoughts on the future of the merged company, "My dream would be that Hapag-Lloyd and Hamburg Süd are joined by a shipping company from the Far East. It is well known that I think NOL from Singapore is suitable."
On the consolidation front it would seem shipping’s reputation as a cyclical industry remains well justified.
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