The proposed merger between German shipping line Hapag-Lloyd and Chilean carrier Compañia Sud Americana de Vapores (CSAV) has been approved by the European Commission (EC).
The EC clearance given under the European Union Merger Regulation comes on the condition that CSAV withdraws from two consortia on the trade between Northern Europe and the Caribbean and South America’s West Coast, “where the merged entity would have faced insufficient competitive constraint to avoid a risk of price raises,” the EC said in an official release dated September 11.
The commitments offered by the two companies address these concerns, it added. “The companies offered to terminate the two consortia in which CSAV currently participates on these two trade routes—i.e. the Euroandes consortium and the Ecuador Express consortium, both with MSC. This will eliminate the additional links between previously unrelated consortia that the merger would have created on the two routes.”
With the remedies proposed, the Commission concluded that “the proposed transaction, as modified, would not raise competition concerns anymore.”
European Commission Vice President in charge of competition policy Joaquín Almunia said: “Liner shipping plays a central role in global trade, so competition in this sector is essential for businesses and consumers in the EU. Through the commitments, our decision averts the risk that the merger between Hapag-Lloyd and CSAV could lead to any price increase.”
Hapag-Lloyd and CSAV both said they welcome the EC’s decision. In early August, the Department of Justice of the United States also cleared the planned merger.
Approvals in a few other jurisdictions are still pending, which if granted would pave the way for the creation of the fourth largest container shipping company in the world after Maersk, MSC, and CMA CGM.
A successful transaction between Hapag-Lloyd and CSAV will enable them to pool together some 200 vessels, build an annual transport volume of 7.5 million twenty-foot-equivalent units, and realize a combined turnover of about EUR9 billion.
The EC said it was notified on July 23 of the transaction entered into by the two shipping firms. Hapag-Lloyd and CSAV signed a binding business combination agreement in April.
G6 voids two sailings on Asia-US West Coast
Meanwhile, the G6 Alliance said it will cancel two voyages on the Asia-U.S. West Coast “due to seasonal changes in market demand.”
One of the void sailings will take place on week 42 on the CC2 service, with expected time of arrival at Ningbo of October 12, 2014, and on week 44, with ETA at Los Angeles on October 30.
The other cancelled voyage is on the SC1 service, scheduled for week 41, having an ETA at Kaohsiung on October 6, and for week 44, with ETA Los Angeles on October 27.
The G6 Alliance members are APL, Hapag-Lloyd, Hyundai Merchant Marine, Mitsui O.S.K. Lines, Nippon Yusen Kaisha, and Orient Overseas Container Line.
