Hapag-Lloyd, CSAV Sign Merger Deal

Behrendt (left) and Hasbún signed the deal at Hapag-Lloyd headquarters

Hapag-Lloyd AG (Hapag-Lloyd) and Compañía Sud Americana de Vapores (CSAV) said they have officially reached a merger agreement that will bring CSAV's container business under the umbrella of the German shipping line.

The deal will make Hapag-Lloyd the world's fourth-largest liner shipping company, with about 200 vessels, annual turnover of €9 billion ($12.4 billion), and one million twenty-foot equivalent units (TEU) of capacity.

The agreement, which is still subject to regulatory approvals, will initially give the Chilean company a 30 percent stake in Hapag-Lloyd, making it a core shareholder of the company, together with the City of Hamburg and Kühne Maritime.

A capital infusion after the transaction is completed will bring CSAV's share up to 34 percent, and a second capital increase will be linked to Hapag-Lloyd's planned stock exchange listing.

"I am delighted that we have succeeded in concluding this partnership through which our two companies are playing an active part in consolidating the liner shipping industry," said Michael Behrendt, chairman of Hapag-Lloyd's executive board.

CSAV CEO Oscar Hasbún said the deal will provide greater economies of scale and a better competitive position for the combined company, creating an annual savings of at least $300 million.

"The combination with CSAV, Latin America's leading container shipping line, considerably strengthens Hapag-Lloyd in this growth market and adds a strong position in the North-South traffic to the company's global network and to its established strength in East-West traffics," he said.

The companies said their order books also complement each other, with Hapag-Lloyd receiving the last of 10 13,200 TEU vessels it had on order by the end of this month, while CSAV has seven 9,300 TEU ships scheduled for delivery in 2014 and 2015.

"This means that we will have a young and cost-efficient fleet," Hasbún said.

Behrendt said last month that the deal would bring the company "within striking distance of the three largest shipping companies."