German Container Shipping Firm Excluded from HMM Acquisition Battle

In the process of selecting eligible acquisition candidates for a shortlist for HMM, the largest container shipping company in Germany, Hapag-Lloyd, which had expressed interest in the acquisition, has been excluded. As a result, it is anticipated that the acquisition battle will unfold as a three-way contest involving Dongwon, Harim, and the LX Group.

According to sources in the investment banking (IB) sector on Aug. 29, the Korea Development Bank (KDB) and the Korea Ocean Business Corporation (KOBC) are expected to select Dongwon, Harim, and the LX Group as eligible acquisition candidates for notification to individual companies within this month. Concerns have arisen that providing foreign shipping companies with the opportunity to conduct due diligence on domestic-flagged carriers could have a detrimental impact on the domestic maritime industry.

Previously, the Federation of Korean Maritime Industries and the Busan Port Development Association also issued a statement expressing that HMM should not be sold abroad for national security and similar reasons. In their joint statement, the two organizations emphasized, “We are concerned about the potential overseas outflow of invaluable national assets, including decades of accumulated expertise in maritime logistics, if HMM were sold to Hapag-Lloyd. This could also pose a serious threat to national security.”

With Hapag-Lloyd’s exclusion, attention is expected to shift towards how the other three groups will secure acquisition funds. It was reported that they submitted bids during the preliminary bidding on Aug. 21, with offers in the range of 5 trillion won (US$3.77 billion).

The representatives of the seller plan to grant the three selected eligible acquisition candidate groups the opportunity for due diligence over the next two months. Following the conclusion of the due diligence process, they intend to proceed with the final bid and complete the sale by the end of this year.