The Competition Commission of South Africa has rejected the merger proposal of Japan’s “Big 3” container carriers Nippon Yusen Kabushiki Kaisha (NYK), Mitsui O.S.K. Lines (MOL), and Kawasaki Kisen Kaisha (K Line).
In arriving at its decision, the South African regulator said it considered the impact of the proposed transaction on the container liner shipping market and on the adjacent car carrier shipping market where the joint-venture partners compete.
“The Commission has found that the structure of the container liner shipping market is conducive to coordination based on previous collusive conduct in the container liner market in other parts of the world,” the watchdog said in a release dated June 21. “The merger increases the likelihood of coordination as it creates further structural linkages in the container liner market.”
It also found that the proposed transaction “creates a platform for coordination in the car carrier market which has a history of collusion involving the merging parties. The parties have been prosecuted in some jurisdictions, while investigations are underway in others. It is the Commission’s view that the merging parties may require a formal mechanism for the further collusive conduct in the car carriers market. The joint venture provides such a mechanism.”
The commission continued that the proposed transaction is “likely to increase the scope for coordination in the container liner shipping market, while creating a platform for coordination in the car carrier market.”
It further found that “there are no efficiencies that outweigh the anti-competitive effects of this transaction and that there are also no remedies sufficient to address these effects.”
The authority also observed that “there are no public interest issues that could outweigh the anti-competitive effects arising from the proposed transaction.”
The setback for NYK, K Line, and MOL comes after the U.S. Federal Maritime Commission rejected last May their proposed union based on jurisdictional grounds.
Earlier this month, the three Japanese carriers announced they intended to name their new merged entity “Ocean Network Express,” or ONE, and launch it April next year.
Photo: SkyPixels
