Hapag-Lloyd and CSAV complete merger

DECEMBER 2, 2014 — Hamburg, Germany, headquartered Hapag-Lloyd and Valparaiso, Chile, headquartered Chilean Compañía Sud Americana de Vapores (CSAV) have completed a merger that will create the fourth largest container liner shipping company in the world

Under the arrangement, CSAV is merging its container shipping business into Hapag-Lloyd in exchange for a shareholding stake that will see it become a core shareholder, with an initial 30% of the company. That will make CSAV Hapag-Lloyd's largest shareholder, ahead of the City of Hamburg with a 25.81% stake, Kühne Maritime GmbH with 19.72% and one-time parent TUI AG with 15.43%.

There are plans to strengthen the company by raising capital of EUR 370 million by December 31, 2014, in which CSAV will take a share of EUR 259 million and Kühne Maritime EUR 111 million. The ownership structure of Hapag-Lloyd AG will then be: CSAV  with 34% after the cash capital increase, City of Hamburg 23.2%, Kühne Maritime 20.8% TUI 13.9%, Signal Iduna 3.3%, HSH Nordbank 1.8%, M.M. Warburg 1.8% and Hanse Merkur (1.1%).

CSAV, HGV and Kühne Maritime have agreed to pool 51% of the shares in Hapag-Lloyd in order to discuss and make key decisions together in the future.

Of this pool structure, CSAV owns a 50% participation, while HGV and Kühne Maritime will own 25% each.

The contracts for the merger of the two companies were signed back in April in Hamburg. With approval from all the relevant authorities all condition precedents were fulfilled.

The merger is expected to produce annual savings of at least $300 million are anticipated as a result of network optimizations, improvements in productivity and reductions in costs.

The container shipping giant created by the merger will have around 200 vessels with a total capacity of approximately one million TEU, transporting some 7.5 million TEU every year and will set up its fourth regional headquarter in Valparaiso, Chile. Revenues will be around $12 billion, the combined entity joins the elite group of international shipping companies.

Rolf Habben Jansen, Chief Executive Officer of Hapag-Lloyd, says: "This is a big day for both companies. With Hapag-Lloyd's strength in Asian traffic and on the North Atlantic, combined with CSAV's strong position in Latin America, we will become the leading shipping company in this region – and thereby be able to offer our global customers an even more attractive network and wider range of products. Our ability to compete will also be significantly enhanced by closing the gap to the top three of our industry."

He added, "there will be no major changes to the way we work until the transition to the Hapag-Lloyd systems towards the end of the first quarter 2015".

Oscar Hasbún, CEO of CSAV, adds: "We are very proud of the fact that our two long-established companies will now become one of the most prominent players in the global container shipping industry and that this company has a firm foothold in Latin America, including our home market of Chile. We fit together perfectly thanks to our complementary network, our customer structure, and our excellent professionalism and reputation".

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