MSC makes offer for 49.9% stake in HHLA

MSC has made a cash offer for 49.9% of the shares in Hamburger Hafen und Logistik AG (HHLA), worth €16.75 (US$18.00) per A-share.

As markets closed on Tuesday, HHLA shares were valued at €11.54 (US$12.40), giving the company a market value of around €840m (US$900m).

The offer represents a 57% premium on the 30-day volume weighted average price.

If MSC manages to hold 100% of the free-floating A-shares are completion of the deal, it will own 49.9% of HHLA while the Free and Hanseatic City of Hamburg will hold a majority 50.1% stake.

Should MSC hold less than 100% of the A-shares after completion, the shareholding ratios will be aligned such that the city of Hamburg indirectly holds 50.1% of the A-Shares.

As part of a binding Memorandum of Understanding (MoU) between MSC and the City of Hamburg, the carrier will substantially increase its container volume at HHLA terminals in Hamburg, beginning in 2025 and raising it to at least 1m teu per year from 2031 onwards.

In addition, MSC will establish its new German headquarters with several hundred employees in Hamburg.

Furthermore, the partners have agreed to commit on a long-term investment plan to be developed in alignment with HHLA.

The aim is to establish a strong and well-funded basis for the further development of HHLA and the entire Port of Hamburg, making it a central hub for MSC’s globally connected network of container services and logistics chains.

Soren Toft, CEO of MSC, said: “The City of Hamburg and MSC have had a close bond for decades.We are excited to build on this long-standing partnership today by integrating the City of Hamburg and Germany even closer into our global ocean freight network and diversified intermodal footprint across Europe.

“This deal not only expands MSC’s global reach, but also unlocks the trade potential for the City of Hamburg and Germany.”

Dr Peter Tschentscher, First Mayor of the Free and Hanseatic City of Hamburg, said: “The strategic partnership between the City of Hamburg and one of the world’s leading shipping companies, MSC, is a milestone in the further development of our port.

“It reflects MSC’s strong commitment to the Port of Hamburg, is in line with the Senate’s strategic port policy goals and can give our entire maritime economy the boost it needs in difficult times.”

Dr Melanie Leonhard, Senator of Economy, City of Hamburg, noted that the partnership would “drive forward the digitalisation and the transformation of logistics in the Port of Hamburg”.

Should the deal go ahead, the employee participation currently in place at HHLA will remain unaffected by the planned transaction.

The future governance structure will also be secured on a partnership basis, while the City of Hamburg will retain the right to nominate the CEO and chair of the Supervisory Board of HHLA.

The partnership is stipulated for an indefinite time, with a termination possible after 40 years at the earliest.

MSC will draft the takeover offer document, which will be submitted within the next four weeks for approval by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) which will take approximately 10 working days.

Immediately after the approval the offer document will be published, expected for the second half of October.

During the following four-week offer period, that will be followed by a mandatory two-week period, investors can decide to accept the offer.

HHLA’s executive board is set to review and evaluate the takeover offer, in consultation with its supervisory board.

The offer is subject to the granting of the necessary competition law and other regulatory approvals as well as approval by the federal state parliament of Hamburg.