Maersk’s Attempt
As Denmark’s Maersk Line, the world’s largest shipping company, announced that it will be able to grow through acquisition instead of building new vessels, Maersk may attempt to take over Hanjin Shipping and Hyundai Merchant Marine (HMM), according to investment bank Jefferies International.
Both Hanjin Shipping under court receivership and HMM adjusting debts needed a strong partner and Maersk was the only shipping company with funds to take over the two Korean shipping firms, said David Kerstens, an analyst on the transportation business at Jefferies International in an interview with Bloomberg on September 27.
“Maersk has a limited number of acquisition targets. This is because most container shipping companies unite with alliances or are controlled by families or governments,” Kerstens said. “The most likely scenario is that Maersk will take over assets from HMM and Hanjin Shipping,” the analyst forecast.
Maersk Line has been taking the lead in expanding the sizes of containerships by placing orders for new vessels. But last week, the company announced that they will no longer place new vessel orders and increase their market share through M&As.
“This year had many M&As. The world’s second largest shipping company next to Maersk expanded its size,” Kerstens said. “As a result, Maersk confronted tougher competition.”
More than ten years have passed since Maersk carried out its last large-scale acquisition. The company is forming the “2M” Alliance with MSC, the world’s second largest shipping company. HMM is also planning to join the alliance.
When it was known that HMM decided to take part in the 2M in July, it was predicted in the global shipping industry that Maersk might take over HMM in the future.
Kersterns said that Maersk was more interested in vessels from HMM than buying entire Hanjin Shipping under court receivership. According to VesselsValue, containerships of Hanjin Shipping are estimated at US$1.4 billion.
Hanjin Shipping has a global market share of about 3%. The half of the market share was realized through leased ships. HMM accounts for about 2%.
Maersk accounts for about 15% of the world’s container transport. But in the transpacific line, its share places third with 8%. The takeover of Hanjin Shipping and HMM will empower Maersk to double its market share in this route, Kersterns said.