October 12, 2008
Hamburg consortium to acquire Hapag-Lloyd
A German billionaire whose house in Switzerland looks like the bridge of an ocean liner now has some real ships to to deal with.
TUI AG's Supervisory Board has approved the sale of Hapag-Lloyd AG. The bid will be awarded to the Hamburg-led Albert Ballin KG consortium.
The Albert Ballin consortium is headed by businessman, Klaus-Michael Kühne, and has the government of Hamburg as a partner with a 35-per-cent stake.
Klaus-Michael Kühne is no 128 on the Forbes world list of billionaires with a net worth of $5.6 billion. According to Forbes he is the grandson of August Kühne, a founder of transport and logistics group Kühne & Nagel and holds 56% of the publicly traded group, which he has run for four decades.
"Hamburg-born Kühne must really miss the sea," says the Forbes profile. "Although he lives in landlocked Switzerland, has built an extravagant house said to look like the main command deck of an ocean liner.The consortium takes its name from Albert Ballin (1857-1918) the founder of Hamburg America Line (whose German acronym supplies the Hapag in Hapag-Lloyd).
Hapag-Lloyd AG will be sold to a Ballin subsidiary of at an enterprise value of 4.45 billion euro.
TUI AG will be an active investor in the new company, taking a 33.33 per cent entrepreneurial stake company at a purchase price of 700 million euro.
""Despite an adverse environment, the price we have achieved for container shipping reflects its fair value even under normal market conditions", said TUI CEO Dr Michael Frenzel. He continued: "Selling only two thirds of Hapag-Lloyd has made this price possible. In addition, our entrepreneurial stake will offer us the opportunity to benefit from the future earnings potential."
The transaction will be subject to approval by the anti-trust authorities.
The sale of Hapag Lloyd to a German consortium is reminiscent of how another iconic Hamburg instititution, Germanischer Lloyd, narrowly escaped a foreign takeover, when it was acquired in 2006 by Hamburg businessman Guenter Herz, the major shareholder in the Puma sportswear empire, beating out Bueau Veritas.
Dr. Frenzel emphasized that the Ballin consortium had won the bid for Hapag-Lloyd in a fair bidding process.
A neutral investment bank not involved in this sale process has confirmed in a fairness opinion that a fair sale price has been achieved and that the decision was exclusively based on value criteria.
"The sale to the Hamburg-led consortium is a positive outcome for the shareholders of TUI AG, for Hapag-Lloyd and its employees and not least for Hamburg and for Germany," said Dr. Frenzel.
TUI AG is entitled to sell shares in the company. The co-shareholders have a pre-emption right. Moreover, TUI has a right of first offer to sell the shares to the Hamburg-based consortium. The first exercise date for this option will January 1, 2012. Dr Michael Frenzel will remain head of the Supervisory Board of Hapag-Lloyd AG.
The shareholders of TUI AG are to receive a special dividend following the completion of the sale. The amount to be distributed for the 2008 financial year will be determined in the context of the preparation of the annual financial statements.