What will be the size of the largest containerships ordered by the end of this year?

10,000 TEU
12,000 TEU
15,000 TEU

August 21, 2005

TUI to acquire CP Ships

Germany's TUI AG--parent of Hapag Lloyd--says it has agreed to acquire CP Ships Limited in an all-cash transaction for Euros 1.7 billion (US$ 2.0 billion), or US$ 21.50 per share. As of 30 June 2005, net debt of CP Ships was Euros 261 million (US$ 316 million). The Board of Directors of CP Ships has unanimously recommended that shareholders of CP Ships accept the offer.

The offer price represents a premium of 24.9% over CP Ships' volume-weighted average closing price of the last three months, and 9.7% over CP Ships' closing share price on August 19, 2005, the last business day before the offer was announced.

"This transaction will enhance growth opportunities over the longer term and will enhance value for TUI's shareholders through CP Ships' earnings potential and the realization of synergy potential in operations and ship networks", said Dr. Michael Frenzel, CEO of TUI AG. "Our enlarged shipping business will be well positioned to take advantage of the strong long term growth dynamics in the container shipping industry. This is both a compelling financial and strategic opportunity for us."

TUI says the acquisition of CP Ships will accelerate the growth of Hapag-Lloyd. The combined company will be a top five player, based on capacity, in the worldwide container shipping market and an important service provider across the North Atlantic. It will also offer stronger coverage in the Far Eastern, Australasian and South American trade lanes. In addition, Hapag-Lloyd believes its significantly increased size and presence in the world's shipping lanes will increase its attractiveness to partners in alliances.

"The combination of Hapag-Lloyd and CP Ships will create a company with the strength and scale to compete effectively in an industry where consolidation is changing the landscape. Furthermore, the combined company will offer enhanced resources and opportunities for both CP Ships' and Hapag-Lloyd's customers and employees", said Michael Behrendt, CEO of Hapag-Lloyd.

"The Board of CP Ships undertook a review of our business and its potential opportunities. This transaction represents immediate and attractive value for our shareholders and the Board has recommended it unanimously", said Ray Miles, CEO of CP Ships.

TUI says that Hapag-Lloyd has developed post-acquisition integration plans which contemplate a synergy potential of approximately Euros180 million per annum by the third full year following completion of the acquisition. TUI expects integration costs to amount to approximately 100 million, mostly occurring during 2006. TUI expects the acquisition to be earnings per share enhancing at least post integration, which is expected for 2008.

The combined group currently operates 139 ships (with a further 17 on order) delivering capacity of approximately 400,000 TEU on over 100 routes spanning the globe. Before the effects of consolidation the combined shipping business would have had sales of approximately Euros 5.7 billion and EBITDA of Euros 588 million in 2004.


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