EMEA News
Germany's Two Biggest Shippers May Merge
Germany's two largest containers shipping companies, Hapag-Lloyd AG (Hapag-Lloyd) and Hamburg Südamerikanische Dampfschifffahrts-Gesellschaft KG (Hamburg Süd), are in talks over a possible merger, the companies announced Tuesday.
The combined company would be the world's fourth-largest shipping company with annual revenue over $13 billion, a fleet of 250 vessels and 11,500 employees, Reuters reports.
"This is a business where size matters," Westend Brokers Research analyst Klaus Kraenzle told Reuters.
"Hamburg-Sued would, in the long-term, run into difficulties in keeping up with the big industry players."
"It's a good step, potentially giving Germany one global shipping player."
Many container shipping companies have reported poor results this year, and an October report from The Boston Consulting Group (BCG) suggested mergers and acquisitions may be a good strategy for some in the industry.
After losses in the first half of 2012, Hapag-Lloyd reported a profit of $58.1 million in the third quarter, but it said fuel costs "weighed heavily" on its results and predicted a difficult fourth quarter due to the rough European economy.
In April, Hamburg Süd said 2012 was likely to be a difficult year for the container shipping market, with overcapacity and high bunker prices creating problems for the industry.
