Recent reports have said the German shipping and travel group TUI is seeking to secure friendly investors to help fend off a possible hostile takeover, as some of the group’s major shareholders have demanded a break-up of the firm. Who will be the next owner?

With an estimated value of 4 to 5 billion euro of the container line Hapag-Lloyd, this part of the TUI group is more expensive as the complete TUI group. Last week the total value of TUI was 4,4 billion Euro, including Hapag-Lloyd. And therefore a break-up of the group is worthwhile for the group of major shareholders.

In reaction on this statement the Board of TUI wants to attract friendly private investors to prevent a hostile take-over.

The City of Hamburg, where TUI and Hapag-Lloyd are seated, believes that a merger between Hapag-Lloyd and rival German company Hamburg S?d will be an attractive scenario. But up until now the board of both companies did not like the idea.

Klaus-Michael K?hne, board president of Swiss logistics group K?hne & Nagel AG, said in an interview with Die Welt newspaper he could see himself taking a personal stake of up to a 5 pct in TUI.

“If we will be sold, our new owner will be an Asiatic or a Dane”, said a Hapag Lloyd manager. Several analysts are speculating on a sale of Hapag-Lloyd.

In July there was vague market talk that AP Moeller-Maersk was interested in making a takeover bid for the groups shipping unit. Recently has Jess Soederberg, the CEO of Maersk the largest shipping line of the world, stated in an interview with Die Welt that he is not excluding that Maersk will make some huge take-overs in a short time.

But the Danish will not be the only ones who are interested. Although the market is - due to falling transport prices- strongly in minor, to future looks different. Recently shares of Maersk dropped because some analyst said there are reports of over-capacity on container shipping routes from Asia to Europe. And this situation is expected to last several years. On the other hand a continuous globalization guaranties good businesses for the carrier, with expected two digit growth figures. And to achieve that, the Asian competition must interested too. In that case we may think of the Chinese Cosco and China Shipping, Evergreen from Taiwan or the Korean Hanjin as financially capable to take-over Hapag-Lloyd.

The Hapag-Lloyd group focuses on global container liner shipping. With the acquisition of CP Ships in 2005, the company became one of the top five shipping companies in the world. The Hamburg-based company is present in more than 100 countries and about 500 sales offices. In 2005, Hapag-Lloyd reported revenues of ?3.2 billion and pre-tax earnings of ?281 million. In the same year, Hapag-Lloyd transported 2.7 million TEU worldwide an increase of 10.8% year-on-year while the overall market for container transport only grew by 8.7%. Hapag-Lloyd sets industry standards in terms of customer orientation, service and productivity. The company deploys more than 140 containerships featuring more than 460,000 TEU in capacity across five regions worldwide: North Europe, South Europe, North America, Latin America and Asia.

Source: eLogistics TrendwatcH staff

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