“Ship Ahoy” cry to investors

Late yesterday saw the announcement that a binding agreement has finally been signed between Germany’s Hapag-Lloyd and Chile’s CompaniaSud Americana de Vapores (CSAV) in relation to Hapag-Lloyd’s $390bn takeover of its South American counterpart.  

The deal between one of Europe’s best known shipping lines and CSAV will result in the enlarged Hapag-Lloyd moving into the top four global shipping lines with a fleet of approximately 200 ships and total revenues in the region of $12bn.

The resulting transaction will see CSAV delist from the Bolsa de Santiago, Chile’s stock exchange. However, Hapag- Lloyd’s CEO, Michael Behrendt, has already mooted the possibility of an initial public offering (IPO) of the newly enlarged entity in 2015.

During the global recession both companies hit choppy waters and ended up subject to rescues from their current shareholders as the global oversupply of ships and falling demand took its toll on the industry as a whole.

However, the deal will strengthen Hapag-Lloyds’s Europe-Latin America and Latin America-Asia routes at a time when the shipping industry appears to be returning to more normal levels of demand.