Hapag-Lloyd and CSAV have much to gain by joining forces, but the German and Chilean ocean carriers will face difficulties striking a financial deal, according to Drewry Maritime Research.
An eventual deal could involve anything from a straight takeover by Hapag-Lloyd of CSAV, assuming an acceptable price can be agreed, to the establishment of a joint company, the London-based analyst said.
Hapag-Lloyd and CSAV: Trade Lane MixHapag-Lloyd and CSAV announced in early December that they are discussing whether “a possible business combination or any other form of association would be of mutual interest.”
As there is little service duplication between the carriers they would benefit from combining operations. CSAV is a midsized player in the South American trades, while Hapag-Lloyd is a much smaller competitor in those trades.
By combining their South American cargoes they should be able to more strongly set the agenda for jointly run services with other carriers.
Hapag-Lloyd’s large East-West services could be dovetailed with CSAV’s North-South operations to set up a much improved global network, according to Drewry. Hapag-Lloyd transported 4.1 million 20-foot-equivalent units in the first nine months of 2013, compared with CSAV’s 1.4 million TEUs.
Both carriers were in the red in the first three quarters of the year, following a “ruinous” first quarter and likely will close 2013 with a loss.
Hapag-Lloyd, the sixth-largest container line by fleet size according to Alphaliner, has recently made bullish statements about expanding its market share, with a CSAV deal leading to further consolidation and helping to narrow the gap with the Big Three carriers — Maersk Line, Mediterranean Shipping Co. and CMA CGM. CSAV, still hemorrhaging cash despite trimming activities to focus on core markets, will take delivery of six 9,300-TEUs vessels in 2015 that will be surplus to its requirements without expansion.
“A merger between Hapag-Lloyd and CSAV makes sense operationally but finding a financial agreement will be difficult, “Drewry said.
“CSAV’s new shareholders have invested too much money over the past two years to contemplate cutting and running now.”
