Hapag-Lloyd CEO: Counter Offer for HHLA Would Not Be In Our Interest
Hapag-Lloyd CEO Rolf Habben Jansen said on Thursday that it would not be in the container shipper's interest to make a counter offer for HHLA, the main operator of Hamburg port, and may instead cut its traffic through the hub.
On Wednesday, Switzerland-based MSC, the world's biggest container shipping company, offered to buy almost half of the port operator in a deal that could be worth nearly 1.3 billion euros ($1.4 billion).
Speaking to Reuters in an interview, Habben Jansen said that as a result of MSC's bid, Hapag-Lloyd could reduce its transport to Central Europe through Hamburg to about 70% or 80% of current volumes.
Under the deal between MSC and the city of Hamburg, MSC will make a cash offer of 16.75 euros per share to acquire all listed class A stock in HHLA.
The city of Hamburg, which owns 69% of HHLA's A shares and all of its unlisted S-shares, would retain control of Hamburg port with a 50.1% stake via the S-shares.
As part of the deal, MSC has also offered to increase its transport volume through Hamburg port by 1 million standard containers (TEU) per year. This would mark a 12% increase on 2022, when 8.3 million TEU passed through the port.
A Hapag-Lloyd source reacted with consternation to MSC's offer on Wednesday, saying that effectively paying terminal fees to its biggest competitor under the deal would be an "affront".
Founded in 1847, Hapag-Lloyd considers the northern German city its home turf. It is also partly owned by the city of Hamburg and accounts for more than 50% of container handling at the port.
Habben Jansen said that the MSC-HHLA deal would change the competitive dynamics at the port.
"I believe that the volume that can be handled in Hamburg has its limits," Habben Jansen told Reuters, adding that there were some geographical disadvantages in comparison to its competitor in Wilhelmshaven.
(Reuters - Reporting by Jan Schwartz, Writing by Friederike Heine, Editing by Miranda Murray and Sharon Singleton)