Jefferies: Maersk Line Buying Both Hanjn and HMM a "Likely Scenario"

Jefferies analyst David Kerstens says Maersk Line buying both Hanjn and HMM is a "likely scenario"

Jefferies International Ltd (Jefferies) says Maersk Line will likely look to buy South Korea's two largest shipping firms, Hanjin Shipping Co. (Hanjin) and Hyundai Merchant Marine Co. (HMM), Bloomberg reports.

Shares in HMM, which is currently undergoing creditor-led debt-restructuring, jumped 6 percent Monday following reports it was being offered vessels from collapsed rival Hanjin.

But comments from Jefferies’ transport analyst David Kerstens were then attributed to a 26 percent surge in Hanjin shares.

"Maersk, as the market leader, will definitely participate in the consolidation [of the container markets] - they will have to," said Kerstens, who also noted that the options for Maersk "are fairly limited."

"Most container lines are already tied up in alliances or are family or government-controlled. The most likely scenario is that Maersk would take over the assets of Hyundai and Hanjin."

The need for consolidation has certainly not escaped Maersk Line; on the back of low rates and overcapacity, CEO Soren Skou last year called for more consolidation in the containership segment.

While rival CMA CGM earlier this year acquired Singapore's NOL, Maersk Line has yet to make a major move.

"There’s been a lot of consolidation this year and many of the container lines just behind Maersk have grown,” said Kerstens.

"So Maersk is faced with substantially stronger competition."

And indeed an acquisition of existing tonnage seems likely given comments last week by the company, who said it wants to "grow market share organically and through acquisitions" but ruled out ordering new vessels.

"There are already enough ships in the world," said Skou.