Maersk-Hamburg Sud merger waits for regulatory approval in S. Korea

By Lim Chang-won Posted : November 28, 2017, 11:29 Updated : November 28, 2017, 13:46

[Courtesy of Maersk Line]



Maersk Line, the world's top shipping company, and its German rival Hamburg Sud, which have agreed on their merger, were ordered from South Korea's anti-trust watchdog to withdraw from their alliances with other firms on Asian and other routes.

The two shipping companies have applied to win regulatory approvals before going ahead with their service under a single entity. In October last year, A.P. Moller-Maersk agreed to acquire Hamburg Sud, the seventh-largest container shipping line.

The Fair Trade Commission ruled on Tuesday that Hamburg Sud should withdraw from consortiums or stop renewing its alliances with other firms, citing concern about unfair competition on Asian and Latin American routes if Maersk Line absorbs the German company.

The merger of foreign firms is required to get approval if their annual sales in South Korea exceed 20 billion won (18.4 million US dollars). The merged entity could face an investigation by state prosecutors and other punitive measures unless it observes FTC rules.

The acquisition followed consolidation in the global container shipping industry which saw the liquidation of Hanjin Shipping, formerly South Korea's largest container carrier, in February. Shippers have been in trouble due to falling freight rates stemming from an oversupply of ships and a protracted business slump.

The acquisition of Hamburg Sud, which operates container vessels primarily in trade between the northern and southern hemispheres, will help Maersk Line, a unit of Danish conglomerate, Maersk Group, to boost its presence in global trade, especially in Latin America.


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