THE merger of CSAV into Hapag-Lloyd to create the fourth largest container shipping line is raising questions as to whether the move will be enough to raise the pairs' fortunes, even if it attracts greater volume and raises sales.
For dominant shareholders of CSAV, the Luksic family, the sale of its box shipping division in exchange for 30 per cent of the equity of Hapag-Lloyd would be a means to rescue a business that has been struggling for two years, reports UK's Transport Intelligence.
The German corporation TUI now has the prospect of disposing its stake in Hapag-Lloyd as part of an IPO process while Klaus-Michael Kuehne achieves his aim of forming a larger company capable of competing in global markets.
Kuehne, the Luksics and the City of Hamburg will own the remaining three quarters of the new company.
The underlying market conditions are not that hostile, with container volumes expected to grow by three to four per cent this year, yet the market will be challenging as overcapacity drives down rates.
As Drewry Shipping analysts note, "freight rates are increasingly being dictated by carrier behaviour and psychology, rather than the fundamentals."
And desire to buy new ultra-large ship is driven by the fear of losing market-share rather than the ability to deliver improved profitability.
WORLD SHIPPING
25 April 2014 - 22:36
Outcome of CSAV-Hapag-Lloyd's merged entity uncertain
THE merger of CSAV into Hapag-Lloyd to create the fourth largest container shipping line is raising questions as to whether the move will be enough to raise the pairs' fortunes, even if it attracts greater volume and raises sales.
WORLD SHIPPING
25 April 2014 - 22:36
Outcome of CSAV-Hapag-Lloyd's merged entity uncertain
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