Tuesday , 21 November 2017
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Maersk Line to acquire Hamburg Süd for US$4bn
The acquisition remains subject to regulatory approvals

Maersk Line to acquire Hamburg Süd for US$4bn

Maersk Line will acquire Hamburg Süd for a total of €3.7bn (US$4bn) on a cash and debt-free basis.

The acquisition, which is still subject to regulatory approvals, was approved by the boards of both the Danish shipping company and the German carrier’s owner Oetker Group.

Maersk Line expects to complete the deal by the end of the year, with both companies continuing as separate and independent companies until then.

The Danish carrier, which announced the signing of a sale and purchase agreement with the Oetker Group in March this year, will finance the deal through a syndicated loan facility.

According to a company statement, combined the two carriers will be able to realise operational synergies of around US$350-400m annually over the first couple of years following completion of the acquisition.

The cost synergies will mainly be attributable to the integration and optimisation of the networks and standardised procurement, with APM Terminals (APMT) also expected to benefit from increased volumes especially thanks to investments in Latin America.

Søren Skou, CEO of Maersk Line and A.P. Moller – Maersk, said: “Our due diligence confirmed that Hamburg Süd is a well-run company with strong and highly respected brands. We have confirmed the anticipated synergies and we are convinced that our plan to maximise customer retention is the right path forward.”

Hamburg Süd is set to remain under its own management and with full brand responsibility.

Skou added: “We consider the purchase price of €3.7bn (US$4bn) a fair valuation of Hamburg Süd. By keeping Hamburg Süd as a separate and well-run company, we will limit the transaction and integration risks and costs while still extracting the operational synergies.

“The acquisition of Hamburg Süd will therefore create substantial value to Maersk Line already in 2019.”

Maersk Line also committed to maintaining the presence of the German company in Hamburg and agreed to lease the local head office, initially for a period of five years.

Dr. Ottmar Gast, chairman of the Hamburg Süd executive board, said: “We see the acquisition of Hamburg Süd by Maersk Line as a natural development and we are convinced that Hamburg Süd will thrive under continued own management and maintain not only the services offered to its customers, but also provide its employees a fantastic opportunity to continue shaping the future of the industry as a leading service provider.”

Following Maersk Line’s announcement in December 2016 of its plans to acquire Hamburg Süd, the proposed deal was approved by the US Department of Justice in March, and by the EU Commission in April subject to conditions.