Drewry: HMM, Hanjin Mull Merger

Maritime Activity Reports, Inc.

March 8, 2016

 A merger between Hyundai Merchant Marine (HMM) and Hanjin Shipping remains a real possibility, says the London-based analyst firmDrewry, who has looked at how such a company will look like.

 
The  research paper published by Drewry Maritime Equity Research last month concluded that Hyundai Merchant Marine (HMM) “will likely survive" the company's highly publicized financial hardships, "but that a merger with compatriot Hanjin Shipping is a very real possibility.”
 
The research firm said in its Container Insight Weekly previous merger talks between HMM and Hanjin were put to rest by the Korean government last year, but the debt situation in both companies was causing serious concern in local circles and could bring the companies back to the table.
 
“A merger would propel both carriers from being on the peripheries of the Top 20 to the become the fourth largest operator in the world (before the merger of Cosco and CSCL into China Lines) with combined worldwide volumes of 8 million teu from a fleet capacity of just over 1 million teu, giving a market share of 5% based on the current fleet,” Drewry says.
 
A merger would propel both carriers from being on the peripheries of the Top 20 to the fourth-largest operator in the world (before the merger of Cosco and China Shipping Container Lines into China Lines) with combined worldwide volumes of 8 million 20-foot-equivalent units from a fleet capacity of just over 1 million TEUs, a market share of 5 percent based on the current fleet.
 
The far larger orderbooks of the carriers above them would see HMM/Hanjin lose some ground, but a financially stronger company might have a better chance of convincing lenders to fund a new order spree, something that HMM will struggle to do on its own.
 
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