CMA CGM Shopping for Mercosul as Maersk is Pressured to Promote

CMA CGM and Maersk introduced in a joint press launch Tuesday (June thirteenth) that the previous is buying Mercosul Line from the latter:

CMA CGM and Maersk Line have introduced as we speak that they’ve entered right into a binding settlement whereby CMA CGM would purchase Mercosul Line, one of many main gamers in Brazil’s home container transport market.

For Maersk Line to promote a worthwhile transport line it owns appears counter to its present technique of buying smaller carriers. Nevertheless, it seems Maersk has no selection however to promote Mercosul if it needs to finish its acquisition of Hamburg Süd.

Maersk proudly owning each South American transport traces Hamburg Süd and Mercosul would not going be permitted by Brazilian competitors authorities. The Maersk/CMA CGM press launch alludes to this with:

The transaction will be certain that the cabotage sector in Brazil stays aggressive and that clients proceed to profit from a complete selection of carriers.

In April, Ben Meyer reported in American Shipper that Maersk would put Mercosul up on the market, clarifying the reasoning behind the sale with a direct quote from Maersk:

 “With the aim of securing the Brazilian competitors authorities’ (CADE) swift approval of the Hamburg Süd acquisition, it has been determined to divest Mercosul from A.P. Møller – Mærsk,” a Maersk spokesperson stated in an e mail to American Shipper. “The divestment will be certain that the cabotage sector in Brazil stays aggressive and that clients can profit from a complete selection of carriers.”

Based on that article, “Hamburg Süd subsidiary Aliança Navegação e Logística at the moment controls 59 p.c of the Brazilian cabotage market, whereas Mercosul controls round 21 p.c…” Which means if Maersk owned each transport firms, the provider would management a whopping 80% of the cabotage market in Brazil. There would solely be one competitor left, Log-In Logística Intermodal, controlling the opposite 20%.

Since we normally solely speak worldwide transport in Common Cargo’s weblog, cabotage is transport between ports inside the identical nation (typically by carriers or operators from one other nation).

Figuring out since April that Maersk would promote Mercosul to be able to full its acquisition of Hamburg Süd, the actual information that broke this week is who can be shopping for the transport line from Maersk.

In his American Shipper article, Meyer listed not solely CMA CGM as a contender to purchase Mercosul but in addition Mediterranean Delivery Co. (MSC), COSCO Delivery, NYK, and Hapag-Lloyd.

Successful the bid, CMA CGM had this to say about buying Mercosul:

The acquisition of Mercosul Line would enable CMA CGM to strengthen its service providing to and from South America, most notably in Brazil, a market with a powerful potential for growth, particularly on cabotage and “door-to-door” companies.  This exercise is a part of CMA CGM’s core technique, which  is to develop intra-regional sea transportation hyperlinks and complementary companies akin to logistics.

The acquisition is just not completely a accomplished deal. It’s going to, in fact, need to obtain approval from the correct regulatory authorities and depends upon Maersk’s accomplished acquisition of Hamburg Süd per Tuesday’s press launch:

The Mercosul transaction is topic to Brazilian regulatory approval and the closing of Maersk’s Hamburg Süd acquisition. On the earliest, the mixing of Mercosul inside CMA CGM will begin similtaneously the Hamburg Süd integration, which is predicted in This fall 2017. Till then, Mercosul Line will proceed enterprise as typical.

At the moment, there isn’t a motive to imagine we received’t see Maersk proudly owning Hamburg Süd and CMA CGM proudly owning Mercosul by the top of the yr.