Brazil Gives Green Light to Maersk Line’s Acquisition of Hamburg Süd

Brazil’s regulatory authority Conselho Administrativo de Defesa Econômica (Cade) has approved without restrictions Maersk Line’s acquisition of German counterpart Hamburg Süd.

The nod narrows down the number of needed approvals to 10, including clearance from major regulatory bodies from China, Korea, Chile and South Africa.

“Maersk Line’s proposed acquisition of Hamburg Süd was approved by the competition authorities of Brazil (The General Superintendence of CADE). With the clearance decision of today (September 22), the waiting period of 15 days is initiated,” Maersk Line said in a statement to World Maritime News.

“In the clearance decision, CADE’s General Superintendence takes note of Maersk Line’s divestment of Mercosul Line (Maersk Line’s cabotage carrier) to CMA CGM, which was announced on 13 June 2017. The General Superintendence also takes note of the changes in the VSA landscape which will take effect after the closing of the acquisition. Among these changes is Maersk Line’s commitment to the EU Commission to, after closing, withdraw Hamburg Süd from the MESA Vessel Sharing Agreement operating on the Mediterranean – East Coast South America trade.”

In order to secure support for the deal from Brazilian authorities, Maersk Line announced the disposal of Brazil-based Mercosul Line to CMA CGM as a way of ensuring the competitiveness of the cabotage sector in the country.

Namely, Hamburg Süd already has a subsidiary in Brazil, Alianca Navegacao e Logistica, which is a major cabotage carrier along the Brazilian coastline. Keeping Mercosul would have pushed Maersk’s control of South America East Coast’s cabotage to 80 percent.

As disclosed earlier, the integration of Mercosul within CMA CGM is scheduled to start at the same time as the Hamburg Süd integration, which is expected in the fourth quarter of 2017.

“We are very pleased that the General Superintendence’s in-depth analysis of the acquisition has now led to a clearance decision which addresses all competition law aspects of the acquisition. The General Superintendence conducted a thorough investigation and has scrutinized the relevant affected markets, including e.g. container liner shipping, terminals, towage and cabotage. Moreover, the General Superintendence has separately assessed the impact of the acquisition on the VSA landscape in Brazil,” says Morten Toft, Senior Legal Counsel in Maersk Line’s Competition Law team.

“The process of obtaining regulatory approvals from all relevant jurisdictions remains on track. We will now await the expiration of the 15 days’ waiting period, and meanwhile we continue the course of obtaining all regulatory approvals by Q4 2017,” he added.

Maersk Line said it would acquire Hamburg Süd for EUR 3.7 billion (USD 4 billion) on a cash and debt-free basis, which it plans to fully finance through an already secured syndicated loan facility.

The proposed acquisition has been approved by the relevant authorities in the US, Australia, the EU, Mexico, Turkey, Japan, and Ecuador.

The company returned to the black in the second quarter of 2017, posting revenue growth by USD 1bn year-on-year. The company reported a profit of USD 339 million for the second quarter of 2017, against a loss of USD 151 million in the second quarter of 2016.

World Maritime News Staff

 

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