Ocean cargo: Hapag Lloyd still in play as acquisition

By Patrick Burnson, Executive Editor -- Logistics Management, 10/7/2008 10:16:00 AM

“If NOL takes it over, we have one less choice in the marketplace,” said Eric Stubin, president of Trans-Americas Logistics, Inc. in Clifton, New Jersey. “For U.S. exporters, especially, the need for more independent carriers is vital.”

Stubin and other shippers were heartened last week by news that a Hamburg consortium comprising the City of Hamburg and a group of private investors, including HSH Nordbank and Signal Iduna, had upped the bid made by Neptune Orient Lines in its takeover move.

Had NOL not been challenged, it would absorb Hapag’s capacity and resources, thereby becoming the world's third-largest ocean cargo carrier.

According to sources, the consortium’s bid was raised to approximately $5.5 billion thanks to the last minute boost given by shipping finance and insurance companies in the consortium. NOL is said to have topped off its bid at $5 billion. It is believed that the primary motive of the consortium is nationalistic – to keep the German-flag carrier German. There is also considerable sentiment involved in this issue regarding the retention of the Hapag-Lloyd name, and its Hamburg identity.

NOL is 66 percent-owned by Singapore investment company Temasek Holdings Pte. Ltd., which began contemplating the takeover earlier this year. At that time, financial analysts reckoned that the buy-out number would be much higher. A weakening global economy, however, resulted in a more cautious bid.

Hapag-Lloyd’s owner, TUI AG, will also consider Hapag’s debt position before making its decision on the winning bid by October 15.