Maersk Line to pay $4 billion to acquire Hamburg Sud

APRIL 28, 2017 — A.P. Møller - Mærsk AS said today that the sale and purchase agreement for Maersk Line's acquisition Hamburg Süd has now been approved by the boards of Maersk Line and the Oetker Group, which owns the German containership line.

Maersk Line will acquire Hamburg Süd for EUR 3.7 billion (about $4 billion) on a cash and debt-free basis and will finance the buy through a syndicated loan facility.

The acquisition still remains subject to regulatory approvals.

Hamburg Süd will maintain its own structure under its separate brands. Maersk Line has committed to maintain the presence of Hamburg Süd in Hamburg, Germany, and has agreed to lease the local head office, initially for a period of five years

"Today, we have taken a decisive step towards the shared future of Maersk Line and Hamburg Süd. Our due diligence confirmed that Hamburg Süd is a well-run company with strong and highly respected brands. We have confirmed the anticipated synergies and we are convinced that our plan to maximize customer retention is the right path forward. I have no doubt that together we can develop new competitive products to the benefit of our customers and exploit operational synergies. The acquisition is cementing our position as the largest and leading carrier in container shipping, and it will provide great opportunities for the employees of both companies," says Søren Skou, CEO of Maersk Line and A.P. Moller - Maersk.

"We consider the purchase price of EUR 3.7 billion a fair valuation of Hamburg Süd,"says Mr. Skou. "By keeping Hamburg Süd as a separate and well-run company, we will limit the transaction and integration risks and costs while still extracting the operational synergies. The acquisition of Hamburg Süd will therefore create substantial value to Maersk Line already in 2019," says Søren Skou.

Maersk says that, combined, the two companies will be able to realize operational synergies in the region of $350-400 million annually over the first couple of years following completion of the transaction.

The cost synergies will primarily be derived from integrating and optimizing the networks as well as standardized procurement. In addition, APM Terminals' global portfolio will benefit from increased volumes, specifically the many investments made in the Latin America Region.

With the acquisition, Maersk Line and Hamburg Süd will have a total container capacity of around 3.9 million TEU (3.3 million TEU) and an 18.7% (16.0%) global capacity share (Alphaliner per 24 April 2017). The combined fleet will consist of 743 container vessels.

The process of obtaining regulatory approvals is on schedule. On March 23, 2017, the U.S. Department of Justice approved the proposed acquisition and on April 10, 2017, the EU Commission approved the proposed acquisition, subject to conditions.

Maersk Line expects to close the transaction by the end of 2017. Until then, Hamburg Süd and Maersk Line will continue business as usual as separate and independent companies.

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